Top 5 Most Predictable Currency Pairs for Q4 2018
Gold prices extended the declines in the second quarter as expected and mentioned in the Q3 2018 forecast. Price action is now seen sitting closer to the support level of 1160 region. Establishing support at this level could potentially mean a possible change in the long term trend of the precious metal.
For the quarter ahead, gold prices are likely to remain subdued. However, watch for a potential rebound in the price of the precious metal. Monetary policy is likely to keep prices in gold to the downside. The minor support level that was breached at 1215 is likely to turn to resistance in the near term. A break down below 1160 could however trigger further losses in gold.
The GBPJPY currency pair was seen trading rather flat during the third quarter. However, price action managed to test the lower support at 139.50 rather briefly. The rebound off this level was met with a bullish follow through. This could potentially signal a reversal in the near term. However, GBPJPY is likely to maintain its sideways range within the resistance level of 154.41 and the support at 139.50.
With the rebound being confirmed, the GBPJPY currency pair is likely to turn bullish. But this is expected only on a successful breakout of the resistance level. With the price action finishing the corrective move from the rising wedge pattern, we anticipate a turnaround in the next quarter. There is however a risk that the currency pair could slip past the support at 139.50. This could renew fresh declines.
The EURJPY currency pair was seen testing the support area of 128.92 – 126.78 area multiple times over the past few months. Price action had briefly slipped below this level as well. However, with the support now holding and price action on the monthly chart signaling a bullish candlestick, we expect to see some upside in prices.
The next main target will be for the EURJPY to test the previously established highs near 135.47. A breakout above this high will send the currency pair to test the next main resistance level of 138.93. This could put the EURJPY on a bullish trajectory. Failure to maintain the gains could however mean that the support area will fail. This could send the EURJPY lower toward 123.94 support.
The EURUSD currency pair has been trading flat during the previous quarter. Price action was seen briefly testing the support at 1.1297 – 1.1242 region. This marked a retest of the previously held resistance level. However, we expect to see a firmer retest of this support. Establishing support at this level could mean a potential change in trend.
The currency pair will then need to breakout from the resistance level of 1.1852 in order to confirm the upside. Following this, the previous highs from January and February this year at 1.2455 will be the next main target. All said and done, watch for the EURUSD as the currency pair is showing signs of a turnaround in the trend.
#5. WTI Crude Oil
Crude oil prices were seen trading flat on the quarter ending September. However, the bullish bias remains. The commodity is just a few points away from testing the $75.00 handle. This marks a major resistance level. There is scope for crude oil to also further test $76.65 from November 2014. This would mark filling the price gap.
In the near term, any declines could stall near the 60.50 handle. This marks a support level that previously held as resistance. The resistance and support levels are also starting to get narrower. This indicates a potential breakout to the upside. Therefore, for the next quarter ahead, oil prices could be seen rising further.
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