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Weekly Forex Forecast (April 10 – 14, 2017)

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The EURUSD spent the first half of last week consolidating above the 1.0635 handle. This wasn’t surprising given the previous week’s 260 pip bearish engulfing candle.

However, just before Friday’s non-farm payroll (NFP), the single currency began to slip below 1.0635 support. It turned out to be a sign of things to come as the NFP report only exacerbated early session losses.

For the new week, the pair finds itself caught between trend line support from the current 2017 low and the 1.0635 horizontal level, which is now resistance. I mentioned this trend line on Friday as one that could become a factor over the coming days.

But I’m not interested in buying the Euro. Instead, I’ll look for additional weakness below the trend line near 1.0590. Another option would be to sell a retest of the 1.0635 area, but the current 40 pip range doesn’t interest me enough to put capital at risk.

So, for now, I’ll stand aside to see what the next few session have to offer. A daily close below trend line support would expose the next key area at 1.0520. A close below that would pave the way for a retest of the multi-year lows near 1.0370.

Alternatively, a daily close back above 1.0635 would negate the bearish bias for now.

Want to see how we are trading these setups? Click here to get lifetime access.

EURUSD trend line

The GBPUSD lost its bullish momentum last week. I commented on the 4-hour wedge pattern on Wednesday which at the time seemed to favor the bulls.

But as is the case with any terminal pattern, it’s best to let the market make the first move.

With the pair now below 1.2410 on a daily and weekly closing basis, I’d expect any retest of the area to encounter selling pressure. However, former channel resistance (new support) isn’t far below current prices.

As such, we have a similar situation to that of the EURUSD. The tight range on the British pound against the U.S. dollar will keep me sidelined until we have more space to work with.

GBPUSD new resistance

AUDUSD played out nicely for us last week. In fact, from a technical perspective, the pair has offered a few attractive opportunities since late February. One of those was the March 21st bearish engulfing candle at trend line resistance.

But last week’s break of the confluence of support at 0.7608 was no doubt the main event. The potential for such a move is something we’ve had our eye on for some time now.

As long as the pair stays above 0.7500 on a daily closing basis, there’s a decent chance we’ll see buyers try to claw back some of last week’s losses. But given the recent breakdown, I’m only interested in selling opportunities going forward.

Two minor resistance levels on my list are 0.7555 and 0.7585. Bearish price action from one of these two areas could offer another chance to get short.

A daily close below 0.7500 would pave the way for a move toward 0.7330. There is some support at 0.7450 and 0.7380, but the 0.7330 area will likely act as a magnet if 0.7500 falls.

I explain why I’m favoring the 0.7330 area as a target in the March 31st commentary.

Want to see how we are trading these setups? Click here to get lifetime access.

AUDUSD wedge pattern

The NZDUSD has been a slow mover lately. It took sellers fifteen sessions to move just 150 pips.

However, Wednesday’s close below 0.6970 was a significant development. This level is the November 2016 low and is also an area that has served as a pivot since March of last year.

As assurance that 0.6970 is now resistance, both Thursday and Friday encountered substantial selling pressure above the area. Therefore, any rotation back to 0.6970 could offer a favorable opportunity to get short.

Do note, however, that the March lows at 0.6890 will likely attract a bid if tested. As such, any position I take here will be a short-term play.

NZDUSD daily chart

The AUDNZD came alive in February and continued its bull move through the first half of March. It was the first significant higher high since March of last year when the cross was trading at 1.1280.

Since last month’s high at 1.1018, the pair has pulled back and consolidated. But the way in which buyers have held price above 1.0765 suggests a healthy form of consolidation that could lead to the next leg up.

AUDNZD bullish pin bar

Furthermore, Friday’s retest of 1.0765 carved out a bullish pin bar. The candlestick pattern suggests that a move higher is on the way, perhaps back to trend line resistance near 1.0900/20.

As for a potential entry point, the 1.0790 area looks promising. This is the March 27th low and is also very near the 50% retracement of Friday’s range.

Alternatively, a daily close back below 1.0765 would negate the bullish outlook.

Want to see how we are trading these setups? Click here to get lifetime access.

AUDNZD support area

Leave a Comment:

8 comments
Thami says

Hi Justin
Great weekly analysis, do you also actively trade other markets besides Forex?

Reply
    Justin Bennett says

    Thanks, Thami. I also trade options, which is something I’ve thought about teaching in the future in addition to currencies.

    Reply
Sohail says

Good chart

Reply
Angel says

Hello Justin, are these the currency pairs you are looking at?
today is Monday 10th April, 2017 should i enter the trade on the AUDNZD daily, there is a bullish pin bar that formed at a key level?

Reply
    Justin Bennett says

    Angel, these are some of them but not all.

    Sorry but I’m not going to tell you what you should do with your money. That’s a decision you need to make.

    Reply
Brad says

Hi Justin,

It have always been insightful looking at your analysis.

Just a question, for example is we enter a short trade for Eur/Usd based on a 4 hourly or daily close at 1.0580 which broke the 1.0590 levels. Where will you usually placed your stops? Will you wait for the close on a daily basis before you closed the position? What if there is a runaway market and Eur/Usd shot to above 1.07?

Thanks and hope to hear your thoughts.

Reply
    Justin Bennett says

    Hi Brad,

    Those are some pretty broad questions, and the answers vary depending on several factors.

    Reply
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