Ric's Forecast for the Week April 19-25

I'm back after more than 2 weeks of vacation. Here's my forecast for this coming week.

EUR/USD

It's the second consecutive week of losses for the EUR/USD. And it looks like it ain't over yet. ECB President Jean Claude Trichet stated signaled further interest rate cuts coming.

The weekly and daily charts show a continued direction south.

On the daily charts, I am looking at 1.2944 (61.8% Fibonacci) as short-term resistance. If it breaks this, it could go all the way to 1.2726 (78.6% Fibonacci).

Both RSI and MACD support this forecast with RSI at neutral 42 heading south and MACD showing no divergence and no immediate sign of any reversal.

With this, I am looking to SELL the EUR/USD this week whenever setups present themselves.

GBP/USD

This pair has shown no clear direction the past two weeks. Still, I believe the bias remains on the upswing.

I am preparing to go LONG especially on Friday, April 24, when UK Prelim GDP and Retail Sales m/m get released which should be bullish for the Pound. The last 2 days of last week saw the GBP/USD recover. Hence, I will wait for a bounce somewhere near 1.4653 before I enter. If that happens, I expect the GBP/USD to reach 1.5080 late this week or early next week.

RSI is at 57 (high neutral) which supports continued downward slide early this week before bouncing back.

MACD also indicates continued selling pressure.

USD/JPY

Continued run to safety for this pair. Though the pair staged a mild retracement last week, pressure is here this week to go LONG and dump the Yen and head for the Dollar.

On wednesday, April 22, Japanese Trade Balance will be released which is expected to be far worse than last week.

On friday, April 24, All Industries activity will be released which is expected to show lesser activity in the Japanese economy than last month.

So, for this week, I will be looking for a retracement up to 96.57 (61.8% Fibonacci). If it bounces on that level, then it might go all the way up to 102.

Before friday, a couple of speeches of BOJ officials are up. Will keep an eye on those as well.


USD/CHF

On the Weekly Charts, this pair has been on the uptrend for the past 2 weeks. A bounce is also showed at 1.1167 (50% Fibonacci). With not much of a fundamen tal reason for it to go south, I believe this pair will continue upward this week.

MACD shows fast line about to cross over slow line. RSI at 54, with enough room to spare before being overbought.

On the Daily Charts, near-term resistance is at 1.1703. If we see a failure at that level, the pair could back all the way to 1.1400. If it breaks this, the pair could see 1.1800.


USD/CAD

Daily chart shows a bounce at 1.1989. I am looking to go LONG for this paitr this week.

Some fundamental reasons to do so:

Tuesday, April 21, Bank of Canada will release its interest rate decision. If the BOC holds, the rate at 0.5%, I expect the pair to continue on a steady rise. A rate reduction will accelerate a sell-off of the CAD.

On wednesday, Canadian Retail Sales m/m and Core Retail Sales will be released. Both expected to be bearish for the CAD.

RSI shows plenty of legroom for an upward movement, so does MACD with fast line about to cross over slow line.


AUD/USD

A dodji formed on the weekly chart signifying that this pair hardly moved last week. As such, I am expecting a major move this week. The pair is on the top of a six-week rally.

RSI is at 54 weekly with signs of action tapering off. MACD histogram also show signs of upward forc e wavering.

On the daily chart, a hammer forms and closes at 0.7218. This could be a sign of pressure (albeit waning) to go long.

On monday, Australian PPI q/q will be released which is bearish for the AUD. This could cause the pair to go down south monday.

On wednesday, Australian CPI q/q will be released which is expected to be bullish for the AUD. At this point, this could cause the AUD/USD to head back north toward 0.7312, as short-term resistance level. If it breaches this level 0.7400 will not be far away.

There is a high level of uncertrainty for this pair as RSI is at 62 with not much room for upward movement. MACD also shows continued selling pressure.

With this, my overall bias for this pair is downward. Will wait for the economic indicators to be released, look for a failure then enter.

NZD/USD

On the weekly chart, there is no doubt where this pair is headed - south! I am looking to go SHORT on this pair all teh way to 0.5435 (50% Fibonacci and 20-period MVA).

Both RSI and MACD support this.

The daily chart, no sign of tapering off on the RSI and MACD.

With no major fundamental announcement concernming the NZD this week, I expect steady downward trend for this pair this week,


That's my forecast for the week. Let's see what happens.