Currency Forecast – Analysis of the Forex Trends

Currency Forecast – Week 6/3/12 – 6/8/12

Currency forecast (weekly) – an overview of the trends in the forex market for the past week with likely developments for the next week.

 
EUR/USD: The current downtrend is ending for now. No clear signs of a new uptrend at this time

During the last week the pair lost more that 250 pips due to classical so-called “risk aversion,” because of the “Spain situation.” That was until last Friday, when the US jobs data became available and the pair recovered about 120 pips.

The pair will look overbought a bit above 1.2500 (the major technical and psychological level so the chances are that we will not see yet a new clear uptrend during the next couple days. But the indicators suggest that the current downtrend is ending. So be on lookout for this and jump on the train when the new trend can be clearly seen. The price will likely try to stick around 1.2450 for the next couple days. The “bigger picture” is neutral-to-slightly-bearish at this time. Again, the indicators suggest that the downtrend is ending. Possibility of rising and unstable volatility is significant during the incoming week.

Range between 1.2350 and 1.2500 is likely for this week – oversold condition below 1.2350 and overbought above 1.2500.

Common indicators should be fairly accurate in pointing to the direction of the price on the hourly or shorter charts.
 

GBP/USD: The downtrend is taking a break for now – the price flattening out.
 
The pair lost about 400 pips during the last week but recovered a little on Friday. The downtrend is likely to take a break for the next couple days. We will likely see the price flattening around 1.5350 during the next couple days, naturally volatility will decline as well. The pair likely will start to look oversold a bit below 1.5300 so the chances are the pair will rally a bit prior to resuming its way down. A range between 1.5300 and 1.5450 is likely for the next couple days. The longer outlook is neutral – slightly bearish at this time.
 

USD/CHF: Upward momentum is likely to pause.
 
The pair gained about 200 pips during the last week but lost about 100 pips on Friday. This latest development is very unlikely to point to a new uptrend yet. No signs of a new uptrend at this time. The pair likely will look overbought a bit above 0.9750 so we likely to witness a dip prior to the price resuming climbing higher. For the next several days the price is likely to stay around 0.9650 and within 0.9600 – 0.9700 range, and unlikely to deviate very far from these levels. The longer outlook is still modestly bullish at this time.
 

USD/CAD: The uptrend to slow down.
 
The Friday’s dip is unlikely to last. No signs of a downtrend at this time. The uptrend is just pausing for now and the price will be hanging around 1.0400 prior to climbing higher. The price likely will stay within 1.0350 – 1.4500 range the next couple days. The longer outlook is still bullish at this time.

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