Daily Price Action
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Weekly Forex Forecast (April 2 – 6, 2018)

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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.

With another week behind us, the EURUSD is, well, exactly where it was on January 17.

The single currency kicked off last week with a 130 pip surge that retested 2008 trend line resistance. This is a level that has capped every advance since January 25.

However, not long into Tuesday’s session, sellers regained control. By the time Wednesday’s candle closed at 5 pm EST, the EURUSD was trading well below Monday’s open at 1.2347.

I’ve discussed this back and forth price action every weekend since late February. As frustrating as it may seem to those who prefer trading the most popular currency pair, this consolidation is a welcome sight.

The longer the pair consolidates within this terminal pattern, the more explosive the breakout will be. Of course, months of choppy price action requires patience, but the breakout that results should be well worth the wait.

I’m going to hold off on doing anything here or even discussing a likely path forward until the market makes its move. There’s no way to know when exactly it will occur, but the terminal nature of the structure indicates it will be sometime this month.

EURUSD wedge pattern on the daily chart

The GBPUSD began last week on a positive note. Monday’s 100 pip surge put the pair above the previous week’s high and within just 100 pips of 1.4335 resistance.

However, buyers were unable to hold onto those gains. The slide lower began on Tuesday and carried right into Friday’s close just above the 1.40 handle.

This is in line with what I wrote last week, which is that the GBPUSD was in need of a pullback into the 1.40 area. You can see from the chart below how this area has served as a pivot since late January.

From here things are pretty straightforward. As long as 1.40 holds as support on a daily closing basis (New York 5 pm EST), the 1.4335 area remains exposed.

But the 1.40 area is also the gateway to a move lower in my opinion. Should buyers fail to hold the GBPUSD above this level, we could see the pair slip to 1.3900 and perhaps even 1.3760.

I’m going to stay on the sideline until we get a signal from the market. That could be bullish price action from 1.40 support or a daily close below the level.

GBPUSD key support on the daily chart

I received a lot of interest in the USDJPY following Friday’s Q&A post. It seems everyone wants to know where the risk-sensitive pair is headed following last week’s false break below 105.50.

However, I don’t see much to do here, at least not yet. While it is true that the USDJPY showed considerable strength last Wednesday, those gains are overshadowed by the five-month downtrend.

Furthermore, the mid-February break below the 2012 trend line tilts the big picture view in favor of sellers.

But that doesn’t mean the USDJPY or other yen pairs can’t strengthen in the short-term. If they do, though, I have no intention of being a buyer. I’m much more interested in selling at higher levels if we get them.

For those interested in playing yen weakness until then, it’s going to take a daily close (using a New York close chart) above the USDJPY trend line near 106.70 to expose higher levels.

One of those resistance levels includes 108.50. If the USDJPY makes it that high, I will most certainly be on the lookout for a favorable opportunity to get short.

Key support for the week comes in at 105.50. Despite not holding as new resistance last Tuesday, the area has been a key factor since May 2016 and will likely continue to drive price action.

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USDJPY levels on the daily time frame

The GBPJPY continued to carve this 4-hour rising wedge last week. I first mentioned this formation on March 23, and since then we’ve seen two rejections from resistance and one bounce from support late last week.

On Friday we also looked at the weekly chart. Although the actual setup will likely occur on the 4-hour chart, the weekly time frame gives us a big picture view of things.

You can see Friday’s commentary here.

Now, two charts from separate brokers show a break at the end of Friday’s session. However, volume was exceptionally light given the holiday weekend. Thus any break that occurred in the final minutes shouldn’t be trusted in my opinion.

That’s okay by me as I tend to avoid trading during the first 24 hours of the week anyway. However, if the next few 4-hour candles do close (and hold) below the 148.85 area, it could signal a clean break of support.

But don’t be in a hurry to trade this or any pair for that matter. The lackluster volume on Friday will carry over into Monday’s session. As such, a seat on the sideline wouldn’t be a bad idea.

As I mentioned on Friday, a break below wedge support would target 145.00/85 followed by 144.00 and 141.40. Alternatively, if the GBPJPY catches a bid at 148.85, we could see a move higher into the 150.70/80 resistance area.

GBPJPY 4-hour rising wedge

The EURCAD has carved a massive ascending channel. Since coming off multi-year lows near 1.3800 in February 2017, the pair has formed a 2,370 pip channel.

In fact, I mentioned the 1.6100/50 resistance area in the March 18 weekly forecast. Buyers managed a year to date high of 1.6151 on March 19 before slipping by 330 pips.

Here’s how the channel stands as of Friday’s close:

EURCAD daily ascending channel

Now, if we drill down to the 4-hour chart, we can see a significant trend line that appears to have broken down on Friday.

The level that extends from the January 17 low had served as support on several occasions, including the March 23 low. Following Thursday’s breakdown, buyers managed to retest the level as new resistance ahead of the weekend.

As of Friday’s close, the level is holding as new resistance on a 4-hour closing basis.

I’m going to keep a close eye on this one over the next 24 hours. There’s more than enough room to run given that the next key support is more than 200 pips away at 1.5670.

However, a more conservative entry would materialize on a close below short-term support at 1.5840. Either way, as long as this trend line holds as new resistance, the EURCAD looks poised for a move lower this week.

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.

EURCAD 4-hour rising wedge

Leave a Comment:

24 comments
Emuobo says

Thanks

Reply
Md Rezaul hoque says

Nice

Reply
Md Rezaul hoque says

wanderful

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Danish says

Thanks very helpful

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Khwaja Rabani says

Nice forecost.

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Muhammad+Hussnain says

very nice sir justin.

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antonio says

grazie!

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David says

Thanks..

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Norm says

Interesting

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Sera says

I like all your commentaries and especially about USDJPY…I was wondering what step to take next but you explained it very clearly so no more guess work..😄

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prowestoffice@gmail.com says

Thank you for the information.

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Lerato says

Thank you

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Dan says

Hi Justin,
With regard to the USD/JPY are you in any way considering the fundamentals of this pair ? or is it strictly T/A.
You’ve said your only int in selling at higher levels, I guess that would change if bullish evidence reveals ?
Your comment about the 5 month d/trend is valid though.
Thank you for your reports

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Dan says

Hi Justin
The EUR/CAD is an interesting one to monitor.
Thank you

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Madimetja says

Very helpful, thank you 🙂

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Ifeanyi+Alex+Robert says

Thanks you sir

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a@b.com says

the charts published are annoyingly low-res and small size; would be the same if they were not published at all

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rsbuddy says

Thanks you very much for the weekly price action.

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kyle says

Hi enjoy your website but I find it hard to read your charts as all of the info is so small. The only thing readable are your notes and I find myself trying to match my charts to yours so I can see the details. it would be nice to be able to amplify your charts so as to be able to read and correlate the info. Just my opinion lol thanks

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    Roy says

    Kyle.
    You can use the zoom function on your web browser to make the charts bigger.

    Reply
Vincent says

How do you relate your weekly analysis to NFP and is it important to trade it?

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Ferdinand Abia says

Fine analysis. But be more straight to the point.

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Jabir+Laasri says

Hola justin bennett
Buenas noche
Todos saludo
Jabir laasri

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Konrad says

Hello Justin, you’ve said you observe about 20 currency pairs. Could you please list all of them? I also trade on D1 time frame so I’d like to check these instruments.

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