Forex Daily Forecast, Analysis and Prediction

Trading in December is often more challenging than during other times. With major holidays approaching, many market players take time away from the markets, while others limit the size of their transactions.

The GBP-USD has been in an uptrend for a long time now. Since May, this pair rallied from 1.4300 to 1.6300. However, most of the gains were made in the early stages of this run. The later stages brought predominantly sideways move, with the exception of a brief period when the GBP-USD spiked up to 1.6300.

The Japanese Yen relation with the US Dollar has been the focus of currency markets for the last few months. The seemingly ever-stronger Yen prompted an intervention by the Bank of Japan. However, after the initial run up, the USD-JPY fell again, almost touching the all time low.

The Australian Dollar – New Zealand Dollar pair has been through a roller coaster ride this year. It had three major price swings over 1000 pips in magnitude. The bullish moves were capped at 1.3230 and currently the AUD-NZD is approaching this level again.

After a prolonged down move, the last couple of days brought a possibility of a trend change for the EUR-CAD.

Recent developments in Europe took its toll on the common currency. The Euro fell sharply in relation to most other major currencies, including the New Zealand Dollar. In less than a month, the EUR-NZD declined from 1.8700 to 1.7400.

The CAD-JPY spent better part of the year moving down. After reaching a high of 98.47, this pair dropped all the way to 78.41 in August. That was a good size swing down. Under most circumstances, a respectively large correction could be expected, but, to date, we are yet to witness one.

After making the all time high at 1.0182, the AUD-USD dropped sharply, reaching as low as 0.9535 last week. This good size sell off was followed by a few days of advance, with the price closing on Friday at 0.9927.

Last couple of days brought a little reprieve for the Euro. After falling from 1.4281 to 1.2970, the EUR-USD pair bounced to a high of 1.3246 on Wednesday. However, this rally could be short lived.

One of the currency crosses that do not get much attention from mainstream analysts is the Canadian Dollar- Swiss Franc. This pair is often overlooked in favor of US Dollar pairs with these currencies. However, the CAD-CHF moves enough to be a viable trading instrument and is worth following.

Propelled by the sovereign credit crisis in Europe, the US Dollar made strong gains during the last couple of weeks. The EUR-USD pair gets most of the attention, because the Euro is the currency in the countries under duress, but other USD pairs have not fared much better.

With the recent rising tensions in Korea, as well as renewed sovereign debt fears in Europe, the US Dollar became a “safe heaven” and appreciated strongly.

After getting ever stronger for a long time, the Australian Dollar is showing signs of cracking. Initially it seemed to be a case only in the AUD-USD pair, but by now, the charts of other AUD crosses are also suggesting lower levels ahead.

The EUR/USD hit a two month low yesterday in very light trading in anticipation of the Thanksgiving Day holiday. The reason for the drop was a combination of light trading and concern over the economic situation in Ireland.

The New Zealand Dollar has been one of the strongest currencies this year. While the NZD did not make new all time highs against the US Dollar, like the AUD, it reached the highest level in 30 months at 0.7975.