Daily Forex forecast analysis 01-31-2017 – we analyzed the upcoming currency pairs and events of the day that could impact the Forex market, These analysis are published here each day.
As you can see from our chart, the price opened higher and then sold out sharply around 100 pips, but managed to recover more than half of the losses until the end of the day. Those wild swings generally suggest strong interest from both sides of the market to drive prices and considering today is the last day of the month, more volatility could spark again.
If the price continues to trend higher, it could stall again around 1.0719,while a break above would open room towards 1.0770, very close to last week's high.
On the way down, 1.0685 is the first support area and on a break below, 1.0656(December 30th high) would be exposed and also, 1.0623,where the market started to climb yesterday.
-From EU at 10:00am GMT GDP(QoQ, 0.3% previous,0.5% forecast and YoY 1.7% previous,1.7% forecast) will be released.Also Consumer Price Index YoY(1.1% previous, 1.5% forecast) will be released at the same time.
-From US, Chicago Purchasing Manager's Index will come out at 02:45pm GMT(54.6 previous, 55.0 forecast) and Consumer Confidence at 03:00pm GMT (113.7 previous, 112.5 forecast).
We mentioned yesterday that if the market starts to climb higher it could stall around 1.0018 or 1.0034 and the lather proved to be the point where sellers got back in aggressively in the market, driving prices below last week low located around 0.9960. Looking at the 4h chart, there a consistent bear move in play that started on January 3rd, and considering how the price structure continues to develop more downside is expected.
If the price starts to form a correction to the upside., it could find sellers again around 0.9958 or 0.9973, the bottom of the range that was in play for several days in a row.
If, however, the downside continues, we could see an extension towards 0.9928(November 15th low) and on a break below it,0.9887 would be exposed.
The market broke below our key support area,located around 1.2544 and that suggests a weakening of the uptrend that was in play. At this point in time a correction to the upside is not excluded, but short term, a move downward could happen.
So, on the upside, if the market starts to gain some ground, it could be stopped by 1.2544 area, that was breached yesterday. Also, as you can see from our chart, there is a downward price channel developing, so expect the price to be capped at the top of it.
If 1.2544 and the price channel hold, the market could start a new leg down, potentially heading towards 1.2460 yesterday's low or 1.2435, the bottom of the channel.
-From UK Consumer Credit(1.926B previous, 1.700B forecast), Net Lending to Individuals(5.1 B previous, no forecast) and Mortgage Approvals(67.505k previous, 69.400k forecast) will be released at 09:30am GMT.
We assumed that if the price wouldn't breach the 115.06-115.22 area that would mean a new leg down could potentially develop. As you can see from our chart, the market sold out yesterday 150 pips, with a very mild consolidation structure at the end of the day.
Looking at this point the downside is intact, with the price very likely heading down, towards 113.18( close to January 26th low) and on a break below , 112.55 key support area, where the market bounced around 270 pips twice in the last 2 and a half weeks, would very likely provide again some buying interest.
-BOJ press conference is set to begin around 06:30am GMT so watch for any important comments regarding future monetary policy measures.
The price consolidated in the first half of the day and then managed to sell almost 100 pips.As we mentioned several times in the last few days, we think a retest of the 1.3028 key support area is still on the table, and looking at the current price structure that could become possible.
If the market continues to trend lower,1.3052(January 26th low) would be our next support area, while a break below would open room towards 1.3028,where some aggressive buying interest might occur and start to drive prices higher.
If a correction to the upside starts to develop, we could see the price head towards 1.3173, very close to yesterday high, and a break above it would expose 1.3212 area(January 24th swing low).
From Canada, Gross Domestic Product MoM will be released at 01:30pm GMT(-0.3% previous, 0.3% forecast).