Weekly FX Forecast- June 11, 2012

EUR/USD

The EUR/USD pair had an interesting week as usual. The typical and well-deserved bearishness was seen, and as usual the attempts at rallying failed. However, the Friday session saw one of these stick as a result of possible short covering ahead of weekend announcements.

The weekly candle shows a shooting star at the bottom of the last down move though, and this to me suggests lower prices by the end of the week. On a break of the bottom of this week’s range, this pair falls further in my opinion.

AUD/USD

The Aussie had an explosive week as the bulls came out in full force. Out of all of the “risk on” trades, this one looks to have the most promise at the moment. The parity level kept the pair at bay though, and will have to be overcome in order for the bulls to be able to stretch their legs a bit. The trend is definitely down over the last couple of months, but this apparent bounce is well needed at this point.

USD/CAD

The USD/CAD pair looks as if it has found a bit of a top at the 1.04 level. The pair slammed into that level over the week, only to be turned around again. The market almost looks as if it is in a range at the moment, and as a result it is very likely that this week turns out to be bearish overall. The parity level would be an area that I suspect support will come into play in a massive way should we see this level being tested. There are also supportive areas on the way down such as 1.03 and 1.01, so the probability of a sustained fall is unlikely. I will more than likely be looking to buy at the end of the week.

GBP/USD

One of the ugliest pairs at the moment is the GBP/USD pair. The weekly candle ended up being a sickly looking shooting star at the bottom of the recent fall. This candle looks sad, as it suggests that the bulls couldn’t quite hold onto the little rally they formed during the week. This looks horrible at this point, and makes it abundantly clear that the 1.52 level simply must hold for the bulls to have a chance. It looks likely to give way, and on a daily close below that level, I am selling aggressively.