Daily Price Action
Shares

Weekly Forex Forecast (April 16 – 20, 2018)

Shares

Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.

Click here to get access to the same style charts I use on this website.

At this time last week, I was discussing the potential of a EURUSD bounce. The single currency had just tested the April 2017 trend line near 1.2240 and looked ready to move higher toward the 1.2440 area.

Although buyers did push prices higher last week, they ran into a wall of sellers above 1.2360.

With neither buyers nor sellers taking control just yet, this twelve-month wedge pattern could go either way. The short-term trend is up which suggests a break higher, but of the two trend lines below, the one from 2008 has more substance.

I’m going to continue to hold off on trading the EURUSD for now. It’s going to take a daily close (using a New York close chart) above or below trend line resistance or support respectively to pique my interest.

As long as trend line support near 1.2290 holds on a daily closing basis, the 2008 trend line remains exposed. At the moment that level comes in near 1.2440.

Alternatively, a close below 1.2290 would expose 1.2160 followed by 1.2090. However, if the EURUSD does break trend line support over the coming sessions, I’m anticipating a move to 1.1930 and perhaps even 1.1700.

EURUSD daily wedge pattern

The GBPUSD spent the first week of April bouncing in a 90 pip range between 1.40 and 1.4090. I mentioned last week how it was going to take a daily close above 1.4090 to expose the 1.4240 resistance area.

Monday’s 1.4130 close did just that. Not long after breaking above key resistance at 1.4090, buyers forced a retest of 1.4240 during Thursday’s session.

However, sellers weren’t having a weekly close above the 1.4240 handle. The selling pressure was too much for buyers, and the GBPUSD went on to form a bearish pin bar during Friday’s session.

Like several other pairs, I wouldn’t be surprised to see the pound slide lower this week. As long as the 1.4240 area holds on a daily closing basis (New York 5 pm EST), the 1.4090 support area remains exposed.

Keep in mind that any short entry up here would be a counter-trend trade. Therefore, you may want to consider reducing your risk or even passing on this setup altogether.

GBPUSD bearish pin bar on the daily chart

The 107.40 resistance area on the USDJPY has held up better than I anticipated. At the start of last week, I wrote that “it’s going to take a daily close above last week’s high near 107.40 to open up the next key resistance at 108.50”.

That never materialized. Buyers kept the pressure on the 107.40 handle all week, but never managed a daily close at 5 pm EST above the level.

With 107.40 still intact as resistance, it leaves us right where we started on April 9th. The only difference is that buyers now have Friday’s bearish candle to deal with on top of securing a close above the key level.

I have no interest in the USDJPY at this time. I don’t consider Friday’s candle a selling opportunity, and without a close above 107.40, there isn’t much to get excited about from a bullish standpoint.

Free Webinar: Learn how I trade pin bars, draw key levels, and much more! 

Click Here to Register

USDJPY support and resistance on the daily time frame

I mentioned the AUDUSD on Thursday of last week. At the time, the pair was hovering just below falling wedge resistance at 0.7760/70.

The idea was that a close above the 0.7760/70 area would expose the next key resistance at 0.7870/80.

As you can see from the chart below, that never materialized. Buyers did extend the price well above wedge resistance on Friday but failed to secure a daily and weekly close above the level.

I’ve seen some traders suggesting that Friday’s pin bar is an opportunity to get short. If the AUDUSD does trend lower this week, I won’t be along for the ride.

First off, there isn’t enough room to the downside to justify an entry. The risk to reward ratio isn’t nearly favorable enough for my part.

Second, the pin bar formed after two days of sideways movement. In my experience, that suggests a weak signal, and one that could backfire on those who commit to it.

Last but not least, the falling wedge that has developed since January 26 indicates the AUDUSD wants to trend higher.

The three points above do not mean the pair won’t move lower this week. Nobody knows what will or won’t happen. It does, however, dismiss Friday’s bearish pin bar (in my opinion) and keep me on the sideline for the time being.

AUDUSD pin bar at wedge resistance

Following an impressive 400 pip rally that began on March 23, the NZDJPY is at risk of pulling back this week.

Buyers struggled throughout Friday’s session to gain traction above the 79.15 handle. You can see from the chart below how this area has directed price action over the last few months.

In fact, the 79.15 region has influenced the pair since February 2016.

With Friday’s bearish rejection candle in the books, we could see the NZDJPY move lower this week. The next key support doesn’t come in until 78.10 with a close below that exposing the 77.00 area.

Do keep in mind, though, that any pullback here may be temporary. Even with Friday’s bearish candle, the NZDJPY was up 120 pips last week and 340 pips since the March 23 low.

As such, it would be wise to act on the bearish pin bar below with caution or not at all.

Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.

Click here to get access to the same style charts I use on this website.

NZDJPY bearish pin bar on the daily chart

Leave a Comment:

21 comments
Sumantra Kumar halder says

Thank you very much

Reply
Harona says

Thanks pro

Reply
Joshua says

Great one justin!

Reply
Hendry says

Good day Justin ,I am following your recommendations for quite a while and found it to be the best in the industry,all the time you invest in helping people like us in profiting consistently through your recommendations,all I can say is THANKS ALOT!!!

Reply
reuben Samwel says

Thanks pro.

It better also to highlight the best entry and exit points for each pair

Reply
    Roy says

    Coach Justin does not provide entries and exits (signals). he helps us to become better traders by reading and analysing price action by going over his overview and then become familiar with chart time.

    Reply
Karan says

Thank you justin

Reply
Euphemia Nwachukwu says

Thanks Justin for your up dates.Please why is USDJPY fridays bearish pin bar not considered as a selling opportunity.

Reply
    Engr Moses Chukwuemeka says

    Yea, it may not be bearish because even though there is pin bar at key level, the larger picture is showing deformed head and shoulder pattern , carving out of a major bullish reversal. The mean reversion cross over has also authenticated this LARGER PICTURE observation. Hope you are convinced ?

    Reply
Ryan Guderian says

Thank you Justin! As always, I appreciate the time you spend each day to send out your analysis.

Just a thought on the loonie.. CADJPY and CADCHF too may have a bit of a pull back for Monday. Like other JPY crosses,
CADJPY closed with bearish pin bar but also closed around 85 round number and got rejected at 162% retracement of 3/12 swing high to 3/19 swing low.
CADCHF finished off the week capped by the 200 dma and closed with a bear candle. With the BOC rate decision due this week, it only makes sense people will be leaving the CAD positions to take caution.

Reply
Linda says

Thanks for your analysis Justin. It seems you are always on the sidelines despite the set ups, though. How do you make the decision to enter a trade?

Reply
George Demetriades says

My is the same comment as Euphemia…Thanks Justin for your up dates.Please why is USDJPY fridays bearish pin bar not considered as a selling opportunity.

Reply
mahmoud says

TNX PLEASE PUT SIGNAL BY SL AND TP

Reply
Howard says

Thanks Justin.
I am just noting that on USDJPY, there is 7 days’ consolidation buildup below the 107.40 level which may result in a successful breakout to the upside.

Reply
Richard says

Excellent analysis Thank you for your time.

Reply
rsbuddy says

Thank you very much.

Reply
Lilian says

Hi Justin, may i know your red and blue lines moving averages how many days e.g 10 day / 40 day or ?

Reply
    Tshepo says

    10 & 20 EMA

    Reply
Felix says

Thanks a lot Justin.

Reply
bakang says

so where do i enter trades?
positions by the way um a newbie to forex

Reply
Krefise says

Thank you Sir Bennet.

Reply
Add Your Reply