Forex 2015 Forecast for Trading: Major Currency Pairs Prediction

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newdigital, 2015.01.02 10:13

Trading Video: A Big Picture Technical Look at FX and Capital Markets for 2015 (based on dailyfx article)

• Looking at a decade or more of price can offer an eye-opening view of technical opportunity
• The Dollar, EURUSD, USDJPY, S&P 500 and Oil are just a few markets that benefit a 'big picture' review
• Combine the technical with fundamental and market conditions to set up your 2015 positions

Whether you are a short-term scalper or a more patient swing trader, taking a step back to look at the 'bigger picture' can help your trading. We have these past weeks looked at the bigger picture for fundamentals and general market conditions. So, to start off the New Year, we will look at the alluring big-picture technical patterns that have taken shape across the FX and capital markets. Incredible runs like that from USDollar, tentative massive breakouts from EURUSD and EURGBP, and the specter of reversal from the likes of USDJPY and EURJPY offer incredible potential for 2015. Combine the fundamental and market conditions views for the New Year with today's Trading Video technical overview to find your favorite setups.

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newdigital, 2015.01.03 10:53

AUD/USD Monthly Technical Analysis for January 2015 (based on fxempire article)

The AUD/USD starts out 2015 in a position to decline further after a weak close in December. Last month, the Forex pair reaffirmed its downtrend on the monthly chart with its sustained move under the previous main bottom at .8659 and the major 50% level at .8545. Both of these prices are resistance in January. Additional resistance angles come in at .8544 and .8556. The best area to sell on a retracement is the resistance cluster at .8544 and .8545.

The main range was formed by the July 2008 bottom at .6008 and the July 2011 top at 1.1080. Its retracement zone at .8545 to .7945 is currently being tested. Last month’s sharp decline through the upper or 50% level at .8545 means the selling pressure is real which makes the Fibonacci level at .7945 the primary downside target in January. Trader reaction to this price will set the tone for the month.

If the selling pressure is strong enough to take out .7945 with conviction then look for the break to extend into the next uptrending Gann angle at .7508.

Oversold conditions could produce periodic short-covering rallies, but these rallies are likely to set up fresh shorting opportunities. Bearish traders should continue to press the market unless .8544 is taken out and this seems pretty remote given the fundamentals.

Fundamentally, the combination of a weak Australian economy and the impending Fed interest rate hike sometime between April and June should be the forces driving the AUD/USD lower in 2015. Low iron ore prices and a weakening economy in China are two forces weighing on the Australian economy. The interest rate differential is favoring the U.S. at this time. This should be the key fundamental factor to focus on this year.

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newdigital, 2015.01.03 10:56

EUR/USD Monthly Technical Analysis for January 2015 (based on fxempire article)

The new year begins with the interest rate differential strongly favoring the U.S. Dollar over the Euro. Simply stated, the U.S. Federal Reserve is getting ready to raise interest rates in 2015 while the European Central Bank is gearing up for a fresh round of quantitative easing (QE). Rates should rise in the U.S. and should fall in Europe, increasing demand for the Greenback.

The key factor that will determine the ECB’s decision on quantitative easing will be inflation. The central bank is trying desperately to prevent deflation from creeping into the economy. Inflationary spikes can be tolerated because the central banks have aggressive tools to fight this. However, deflation is a difficult challenge because central bank weapons are limited.

The ECB will start to get important inflationary data early in the month which should cause a volatile reaction from traders in either direction. The first key date to watch is January 7. On this date, traders will get the opportunity to react to the latest CPI Flash Estimate and Core CPI Flash Estimate. These reports should determine what the ECB will do about QE at its monetary policy meeting on January 22.

Oversold conditions could produce periodic short-covering rallies throughout the month, but these rallies are likely to set up fresh shorting opportunities. The monthly chart indicates that the fundamentals are bearish and even if they did begin to change, it would take several months to clear out the shorts and form a bottom.

The key number to watch early in the month is the July 2012 bottom at 1.2042. This is the first major downside target so traders may try to take care of this price early in the month. If the selling pressure persists then look for the downside momentum to continue down to the June 2010 bottom at 1.1876.

The 1.2042 price level may be treated like a pivot throughout the month. A sustained move above it may even trigger a rally back to 1.2341, but this is unlikely to occur unless the ECB backs away from implementing QE this month.

The initial reaction to QE should be bearish for the Euro. The size of the break will be determined by the size and length of the program. Some optimistic investors feel the EUR/USD will decline during the first quarter of 2015, but will strengthen throughout the year because the QE will start to help stimulate the Euro Zone economy. Others feel that the U.S. faces too much exposure to China and this could derail its economy.

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newdigital, 2015.01.03 10:59

GBP/USD Monthly Technical Analysis for January 2015 (based on fxempire article)

The GBP/USD opens up the new year in a weak position. 2015 begins with the interest rate differential in favor of the U.S. Dollar. This is 180 degrees from last December when investors were making powerful bets that the Bank of England would raise interest rates before the U.S. Federal Reserves.

The British Pound topped in July 2014 when it started to become clear to traders that the BoE didn’t have the all clear signal from the economy to begin hiking rates. Like many of the major economies, the U.K. is battling to keep inflation above its benchmark 2 percent level. This is the story that will concern investors throughout the new year.

Since the U.S. Fed appears to be on a path toward an interest rate hike sometime between April and June, the first quarter and perhaps the second quarter will have to be conceded to the U.S. Dollar. This means the GBP/USD will continue to trade sideways to lower at least during the first half of the year.

The year ended with the Forex pair trading on the bearish side of a major retracement zone at 1.5720 to 1.6001. This levels are key resistance in January.

December’s close at 1.5580 has created some interesting set ups for the month. The first thing traders should note is that the close is on the strong side of the angle that guided the market lower for 5 months. This angle is at 1.5270. Crossing to the bearish side of this angle will put the market in a weak position.

The nearest angle to watch is an uptrending angle at 1.5532. This angle held as support last month so buyers do recognize it. Holding this angle could lead to an early short-covering rally and a slight upside bias.

The tone of the market will be determined by trader reaction to 1.5532. Holding this angle could create enough upside momentum to trigger a short-covering rally into 1.5720.

A failure to hold 1.5532 will mean that sellers have a firm grip on the market and are likely to try to press it into at least 1.5270 in January.

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newdigital, 2015.01.03 11:04

USD/JPY Monthly Technical Analysis for January 2015 (based on fxempire article)

The new year starts with the U.S. Federal Reserve on a path toward raising interest rates sometime between April and June. The Bank of Japan is committed to keeping interest rates low in order to weaken the Yen and attract fresh export business. On paper, there doesn’t appear to be anything in the works that could derail the USD/JPY rally.

The strength of the U.S. Dollar over the Japanese Yen should continue throughout 2015 simply because the interest rate differential favors the Greenback. Overbought conditions could trigger profit-taking breaks, but for the most part, the pressure should be to the upside.

Any surprises with the U.S. economy that could encourage the Fed to back away from or delay an interest rate hike could also lead to weakness. However, this is likely to show up in the U.S. economic reports especially the labor market statistics and inflation data. As long as the U.S. continues to add jobs each month, the Fed should remain on a path toward an interest rate like by mid-year or even sooner.

A stock market sell-off could also encourage Japanese investors to repatriate their money. This may also cause a minor glitch in the solid uptrend, but at this time, the trend doesn’t appear to be in any danger of changing. In addition, if the market gets “too” bullish or gets hit with periods of excessive volatility, the BoJ may intervene to calm things down, but the chances of this occurring are pretty remote at this time.

Technically, the USD/JPY closed the year in an uptrend and straddling a major Fibonacci level at 120.11. Overtaking this level with conviction and sustaining the move could lead to a test of the June 2007 top at 124.13 this month.

A failure to overtake 120.11 will indicate investor indecision which could trigger a break back to the nearest uptrending support angle at 116.82.

The tone of the market this month will be determined by trader reaction to 120.11. The tone of the market for 2015 will be determined by investor reaction to 119.825. Keep this price on your charts all year.

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newdigital, 2015.01.03 11:11

USD/JPY forecast for the week of January 5, 2015, Technical Analysis (based on fxempire article)

The USD/JPY pair initially fell during the course of the week but found enough support below the 120 level to turn things back around and form a nice-looking hammer. The hammer of course is a positive sign, and as a result we feel that this market will continue the uptrend that we have seen for some time now. On top of that, the US Dollar Index of course went higher as well, so it does suggest that overall the US dollar will continue to be the favored currency in the Forex markets. With that, we are buyers of dips in this particular currency pair.

Ultimately, we believe that the US dollar will continue to be bought in favor of the Japanese yen, as the Bank of Japan continues to work against the value of its own currency by stepping into the bond markets and purchasing Japanese Government Bonds, essentially quantitative easing such as the Federal Reserve has done.

Look at the shape of the candle, it suggests that the markets review the 120 level as a bit of a “line in the sand”, but we believe that there is even more support down at the 115 handle than they are, so really at this point time this is a market that looks like it should continue to have buyers step into it again and again.

Keep in mind that the Federal Reserve has stepped away from the bond markets, essentially ending the quantitative easing game. With that, the US dollar will continue to strengthen overall, and with the Bank of Japan doing the exact opposite it makes quite a bit of sense that this market would continue to go higher given enough time and as a result every time it dips I will that the buyers will step in as it makes sense to think of the US dollar as being “on sale” against the Japanese yen every time we fall. In fact, at this point in time we have no scenario in which we are willing to sell this market.

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newdigital, 2015.01.03 11:14

USD/CAD forecast for the week of January 5, 2015, Technical Analysis (based on fxempire article)

The USD/CAD pair fell initially during the week, but then shot higher in order to break out. We closed towards the top of the range, and it now appears that we are heading to the 1.18 handle in very short order. Pullbacks at this point time offer buying opportunities just as they always have, as the US dollar is without a doubt the favored currency around the world. We believe that there is essentially a “floor” in this market at the 1.12 level. We have no interest in selling at the moment.

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newdigital, 2015.01.03 11:17

NZD/USD forecast for the week of January 5, 2015, Technical Analysis (based on fxempire article)

The NZD/USD pair initially tried to rally during the course of the week, but you can see that the area above the 0.78 level offered way too much in the way of resistance. With that, it appears of the market is ready to go lower, so we are sellers overall. However, we would have to break down below the 0.76 handle in order to find enough downward pressure in order to drop to the 0.75 handle, and then of course the 0.70 handle as the Royal Bank of New Zealand continues to jawbone the value of the Kiwi dollar down.

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newdigital, 2015.01.03 11:20

GBP/USD forecast for the week of January 5, 2015, Technical Analysis (based on fxempire article)

The GBP/USD pair broke down below the 1.55 level at the end of the week, essentially “opening the floodgates” to the 1.50 handle. With that, we have plenty of reasons to sell this market and absolutely no interest in buying it. At this point in time, the 1.55 level now looks as if it’s resistance, mainly because it was previously support. The market looks as if it’s ready to continue to grind lower because of that, so we are simply waiting for resistant candle in order to push the value of the British pound down.

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newdigital, 2015.01.03 20:24

EUR/USD Forecast: new 4-year lows (based on fxstreet article)

The EUR/USD pair extended its latest decline in this first working day of 2015 to levels not seen since June 2010. Europe started the day with the wrong foot, as data shows Markit Manufacturing readings missed expectations in the EZ and most of it members, exception made by Germany, where PMI meet expectations of 51.2.

From a technical perspective, the bearish bias remains intact, as the 4 hours chart shows price declined further below its 20 SMA whilst RSI turned lower despite in oversold territory. The immediate bearish target comes at the 1.2000 figure, and it won’t be easy to break on a first attempt; but if it’s tested and the bounce from it remains limited, chances are of a break lower, with the selloff most likely extending down to 1.19.

The 1.2070 level comes as the immediate intraday resistance, with a recovery above it probably triggering an upward corrective movement towards the 1.2120 price zone.

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newdigital, 2015.01.03 20:27

EUR/USD: January 2015 Forecast (based on dailyforex article)

The EUR/USD pair has been in a massive decline for some time now, but when I look at this chart I recognize that we may be reaching the end of the downtrend, at least for a while. After all, the 1.20 level below is a massive support barrier that we have seen come into play a couple of different times over the last five years. With that being the case, and the fact that we have sold off so viciously, I believe that we are reaching the end of the downtrend, at least for the short-term.

With a short-term, I mean possibly several months. Yes, I recognize that the Euro has a lot of issues and could continue to have those issues for some time. Ultimately though, there comes a point in time where there is almost nobody left to continue selling. With that, it’s very likely that the bounce that has been needed for some time is coming.

Is the trend changing?

When I look at the downtrend, I recognize that there is a significant amount of bearish pressure, but at the same time the rate of descent has slowed drastically. I believe that we are at a very important juncture, simply because the pair has been sold off so viciously and so overdone in that time. Ultimately, if there’s any hint whatsoever at the possibility of the Federal Reserve loosening monetary policy again, this pair will skyrocket to the upside.

Because of this, I feel that the market will more than likely look for reasons assert going higher, because quite frankly even in this environment, the 1.20 level is a bit on the cheap side as far as the Euro is concerned. If the European Central Bank suddenly looks less likely to loosen its monetary policy, that’s reason enough for this pair to go higher as well. In other words, I think now the upside risk is a lot higher than the downside risk. We have simply gone too far to the downside to justify selling at this point in time. I think that we will see a little bit of weakness in the beginning of the month, but eventually sometime during the month of January, we will see the buyers return.

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newdigital, 2015.01.04 21:36

EUR/USD weekly outlook: January 5 - 9

The euro fell to four-and-a-half year lows against the dollar on Friday after European Central Bank President Mario Draghi signaled that it would implement quantitative easing measures early this year.

EUR/USD was down 0.85% to 1.2002 in late trade, the weakest level since early June 2010.

In an interview with German financial newspaper Handelsblatt Draghi said the risk of the ECB not fulfilling its mandate of price stability is higher now than six months ago. The remarks indicated that the central will expand its asset-purchase program to include government debt in order to spur growth and inflation.

The annual rate of euro zone inflation was just 0.3% in November, well below the ECB’s target of close to but just below 2%.

The single currency was also pressured lower after data showed that manufacturing activity in the euro area grew at a slower rate than initially estimated in December, adding to concerns over the outlook for fourth quarter growth.

The dollar rose to parity against the Swiss franc for the first time since December 2010, as weakness in the euro added to pressure on the Swiss National Bank to defend its 1.20 per euro exchange rate floor. USD/CHF was up 0.83% to 1.0014 in late trade.

Switzerland’s central bank imposed the exchange rate floor in September 2011 to head off the threat of deflation and protect the country's exporters from a rapidly rising currency.

The SNB eased monetary policy in December, when it imposed negative interest rates on commercial bank deposits, in a bid to prevent the continued appreciation of the Swiss franc against the euro.

EUR/CHF was almost unchanged at 1.2019 in late trade.

The U.S. dollar index, which measures the greenback against a basket of six major currencies, advanced 0.91% to nine-year peaks of 91.47. The index rallied 12% in 2014, boosted by the diverging policy outlook between the Federal Reserve and central banks in Europe and Japan.

In the week ahead, investors will be turning their attention to Friday’s U.S. nonfarm payrolls report for further indications on the strength of the recovery in the labor market. Wednesday’s Federal Reserve meeting minutes will be also closely watched, while the euro zone is to publish preliminary data on consumer inflation.

Monday, January 5

• In the euro zone, Germany is to publish preliminary data on consumer price inflation, while Spain is to report on the change in the number of people employed.

Tuesday, January 6

• In the U.S., the Institute of Supply Management is to release data on non-manufacturing activity.

Wednesday, January 7

• Germany is to publish data on retail sales, as well as a report on the change in the number of people employed. The euro zone is to release preliminary data on consumer inflation and a report on the unemployment rate.
• The U.S. is to release a report on ADP nonfarm payrolls, in addition to data on the trade balance. Later Wednesday, the Federal Reserve is to publish the minutes of its most recent meeting.

Thursday, January 8

• The euro zone is to publish a report on retail sales.
• The U.S. is to produce its weekly report on initial jobless claims.

Friday, January 9

• The U.S. is to round up the week with the closely watched nonfarm payrolls report, and data on wage growth.

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newdigital, 2015.01.05 12:31

AUD/USD drops to 5-1/2 year lows (based on nasdaq article)

The Australian dollar dropped to five-and-a-half year lows against its U.S. counterpart on Monday, as demand for the greenback continued to receive broad support.

AUD/USD hit 0.8036 during late Asian trade, the pair's lowest since July 2009; the pair subsequently consolidated at 0.8057, sliding 0.42%.

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newdigital, 2015.01.05 12:39

AUD/USD Fundamental Analysis January 6, 2015 Forecast (based on fxempire article)

The AUD/USD took its clues from the US dollar this morning. The US dollar rallied as traders listened to a slew of Federal Reserve speakers, who have all shifted into high gear preparing the markets for interest rate increases in the near term. The Aussie fell 34 points to trade at 0.8057 making the RBA happy as they think the Aussie should only be valued around 75 cents. The drop in the currency is also offset by falling Chinese manufacturing data which will mean lower exports.  The Aussie is trading at a 5 year low.

A combination of weak commodity prices and a surging US dollar were weighing on the local currency. The key theme in the new year has been US dollar strength and falling iron ore and coal prices. The lower Australian dollar will benefit local producers.

Late last year, major banks cut their Australian dollar forecasts against the greenback to reflect this recent strength. Currency analysts at Australia’s biggest bank now expect the Aussie to fall to 78 cents by the end of March, down from a previous forecast of 86 cents.

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newdigital, 2015.01.05 12:44

AUD/USD Technical Analysis: Rebound Hinted Above 0.80 (based on dailyfx article)

Resistance	Support
0.8094	0.8020
0.8214	0.7900
0.8290	0.7803

The Australian Dollar fell to the lowest in over five years against its US namesake but positive RSI divergence warns a rebound may be ahead. A daily close above the 14.6% Fibonacci expansion at 0.8094 exposes the December 31 highat 0.8214. Alternatively, a turn below the 23.6% level at 0.8020 clears the way for a challenge of the 38.2% Fib at 0.8012.

Prices are wedged too closely between immediate support and resistance barriers to justify entering a trade on the long or short side from a risk/reward perspective. We will remain flat for now, waiting for a more attractive opportunity to present itself.

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newdigital, 2015.01.07 17:06

Price & Time: EUR/USD Collapse Continues (based on dailyfx article)

• EUR/USD has come under renewed pressure this morning to trade at its lowest level since January of 2006
• Our near-term trend bias remains lower in EUR/USD while below 1.2000
• The next important action/reaction zone looks to be around 1.1750/80
• A medium-term turn window is seen later this week
• A close over 1.2000 would turn us positive on the euro

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Something Interesting in Financial Video January 2015

newdigital, 2015.01.07 17:12

Strategy Video: Avoiding Stumbles on the Entry with EURUSD and EURJPY (adapted from dailyfx article)

• Most traders will experience a time where they are 'gun-shy' or 'too hasty' with taking a trade
• For me, big drops in EURUSD and EURJPY have signaled trade potential but have yet to cue active trades
• The most important step to rushing or delaying a good entry is to always have a plan
  

The first step to any active trade is execution - and it is often the occasion for our first mistake to be made. Most traders will experience a period where they are too conservative ("gun-shy") with taking otherwise good trades and/or are too aggressive ("hasty") in jumping on dubious setups. The best solution to this common malady is approaching each setup with a plan - including a 'checklist' for execution. There are a few other aspects - the opportunity's time frame, your risk tolerance, viable alternatives - that go into the equation as well. We discuss conviction in trade execution using my views on EURUSD and EURJPY as examples in today's Strategy Video.

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newdigital, 2015.01.08 10:45

Intraday Outlooks For AUD/USD (based on efxnews article)

Fed officials rarely comment on the decisions taken by counterparts abroad. Yet the latest minutes included several references to the weight US officials and market participants are placing on new actions to counteract slow growth outside the US. The references amounted to a subtle warning that markets could respond negatively if the foreign policymakers, particularly the ECB, don’t follow through on expectations.

Officials “regarded the international situation as an important source of downside risks to domestic real activity and employment,” the Fed minutes said. They added that the risks were particularly serious “if foreign policy responses were insufficient.”

Consider decreasing a short position. With five waves down from the wave 4 peak, a developing falling wedge (terminating pattern) and a possible bullish divergence are all factors that speaks in favor of considering taking profit on shorts. A break above the November top line will probably trigger buying and a quick move to 0.8216. Also our fulfilled AUD/NZD target (see yday TA) helps forming a base for the AUD.

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Something Interesting in Financial Video January 2015

newdigital, 2015.01.09 05:24

Price & Time: "Overlooked" Symmetry in AUD/USD

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newdigital, 2015.01.09 15:04

2015-01-06 00:30 GMT (or 02:30 MQ MT5 time) | USD - Non-Farm Employment Change

• past data is 353K
• forecast data is 241K
• actual data is 252K according to the latest press release

if actual > forecast (or actual data) = good for currency (for USD in our case)

USD - Non-Farm Employment Change = Change in the number of employed people during the previous month, excluding the farming industry. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity

==========

Total nonfarm payroll employment rose by 252,000 in December, and the unemployment rate declined to 5.6 percent, the U.S. Bureau of Labor Statistics reported today.
Job gains occurred in professional and business services, construction, food services and drinking places, health care, and manufacturing.

Employment in professional and business services rose by 52,000 in December. Monthly job gains in the industry averaged 61,000 in 2014. In December, employment increased in administrative and waste services (+35,000), computer systems design and related services (+9,000), and architectural and engineering services (+5,000).
Employment in accounting and bookkeeping services declined (-14,000), offsetting an increase of the same amount in November.