Forex Weekly Forecast & FX Analysis December 20-24
EUR/USD
The Euro continues to develop a local stage of a corrective upward movement against the Dollar. Last week the price got above the moving averages and once again tested the strong level of 1.1345. It's a very important level. If we look at the price chart, we can trace at least 4 episodes, when the market reacted to it. Given the fact we are generally in a downtrend and the upward movement was corrective, we can consider trading down. This assumption is reinforced by the fact that we are at a strong level and the price failed to break it when it was above the moving averages.
GBP/USD
Last week led to a fairly strong upward movement of the British pound against the US dollar. As a result, all indicators are looking up, and the histogram has reached its maximum values for more than a month. Note that the price stopped its upward movement once it reached the moving averages. It is impossible to trade in the current stage. At this point, the key price level is 1.3304. We are waiting for the price to test it, and look which way the market will move after this. Upward and downward movements are equally possible.
USD/JPY
For the US dollar against the Japanese yen, the lateral corridor between 113.460 and 114.222 is still relevant. We should also note that the moving average is approximately in the middle of this channel, which confirms its strength. The indicators show no trend movement and no volatility as well. We can only say that the price moves inside the range from border to border. Since the market has recently tested the lower border of the channel, we can consider trading up.
AUD/USD
The Australian dollar continues its corrective upward movement against the US dollar. As a result, the price reached moving averages, which almost coincide with the level of 0.7190. It is very important to note that the upward movement led to the divergence, as the market grows and updates its maximum values, while all the indicators are looking down. The price reached the moving averages during the upward movement, but the market failed to consolidate above them. Therefore, taking into account the combination of factors, we can consider trading down, expecting that the market will return to its main trend.
USD/CAD
The US dollar continues to develop an uptrend stage against the Canadian dollar. The most significant characteristics of the last week's trading are high volatility and multidirectionality. Analyzing the last week, it is important to note that during the upward movement the price has reached its maximum value, and the oscillator has moved into the overbought area. At the same time, the maximum value was not confirmed by the histogram. Immediately after this growth, the market collapsed heavily and formed an engulfing candle, which managed to cover more than 5 previous candles. It is also very important to note that the current price is quite close to the moving averages. Therefore, in this situation, we can only consider options for trading up.
USD/CHF
The dollar moves horizontally against the Swiss franc within the moving averages. Horizontal movement is clearly confirmed by the indicators, which are close to their neutral values and do not move away from them significantly. Therefore, the indicators do not give any trading signals. The only thing we can rely on is the price chart. It is important to note that the price has moved down significantly from the moving averages and is near its strong levels, confirmed by the minimum values for a monthly period. Therefore, we can expect that in such a situation, the market will need an upward correction.
USD/RUB
Last week's trading in the US dollar against the Russian ruble pair was characterized by low volatility. However, a much more important characteristic is that the price almost completely coincides with the moving averages and repeats their upward slope. The upward slope is also traced on the histogram, which is obviously growing, although it is still in the negative area. The oscillator is moving mainly horizontally, which indicates that there is no clear trend here and now. Nevertheless, the global trend of the currency pair is still upward. So we can consider only upward trading options.
Gold
The price of gold moved mainly upwards last week and even reached the moving averages. Note that the upward movement can be traced by all indicators. It is especially well seen on the oscillator, which left the oversold area and continued its movement to the overbought area. The histogram is also growing and updates its local maximum values. Given that the oscillator is in the overbought area and the price chart has tested the moving averages, we can assume that the market will need a pullback down.
