Forex Weekly Forecast & FX Analysis January 10-14
The Euro continues to develop a horizontal movement against the US dollar. The lack of volatility can be traced in the indicators, especially in the oscillator, which cannot get away from the level of 50. We should also note that the moving averages are also moving horizontally inside an important price range between 1.1280 and 1.1347. Due to the lack of volatility and the holiday season, trading is not recommended as long as the price is inside the designated range. Let's wait in what direction it will be broken through, and open the transaction in the direction of the breach.
The British pound is rising against the US dollar. It has reached an important level of 1.3606. Note that the divergence formed on the price and the indicator charts has already worked out twice. As a result of these workouts, the price ended up on the right side of the uptrend line and very close to the level of 1.3482. We can say that the ascending dynamics is dominant, so we can consider only trading upwards. The ideal entry point would be close to the level marked on the chart, which can only be reached as a result of a correction.
The Dollar continues to strengthen its position against the Japanese Yen. The price is rising and continues to update its maximum values. The growth is accompanied by the indicators reaching the important levels and remaining in the overbought area. The upward movement allows drawing a trend line, but the last week's trading also allows drawing a corrective downtrend line. Together they form a wedge pattern. The price is close to the top of this figure. I would not recommend trading as long as the figure has not been worked out by the market. We wait in which direction it will be broken through and open the contract.
The divergence, which we mentioned in the previous weekly review, has been worked out by the market and sent the Australian dollar down against the American dollar to the area of the moving averages. If you look at the indicators, they confirm the downward movement. First of all, it can be seen in the histogram, which is in the negative area testing its minimum values for more than a month. We can assume that here and now we are at a local market bottom, so there is a high probability of upward movement to the area of a strong 0.7265 level.
Despite the high volatility of the US dollar against the Canadian dollar, we can identify a sideways range with the boundaries of 1.2700 and 1.2774 as a result of last week's trading. The price is inside this range and moves strictly from border to border. Moreover, the moving average is very close to this range and gradually enters its borders. Thus, once again we should say that trading will not be possible until the range is broken through. We wait for the breakout and open a deal in the direction of the breakout.
The US dollar formed an upward trend against the Swiss franc, after reaching the level of 0.9116. As a result, the price rose above the trend line and reached the level of the moving averages. The lack of volatility and the sideways range, which we mentioned in our previous reviews, was broken through, as there was a fairly strong upward movement confirmed by all indicators. However, we expect that the main downtrend has still not lost its strength, and reaching the moving averages could be an excellent point to open a contract down.
The dollar continues to strengthen its position against the Russian ruble. Last week the price even tested the level of 77.00. If you compare the price chart and the oscillator, you can clearly trace the divergence. If you look at the histogram, it repeats its maximum values for more than a month. The previous time when the histogram reached such a level, there was also divergence on the price chart and it led to a strong move downward. Therefore, we expect that the currency pair will have a downward movement to the area of the trend line.
The divergence, about which we spoke in the previous weekly review, was worked out by the market. As a result, the price went down strongly enough and reached the moving averages and level of 1790.834. We can assume that this point is a local market bottom, after reaching which the price will move up.