Weekly Forex Forecast (April 22 – 26, 2019)

by Justin Bennett  · 

April 21, 2019

by Justin Bennett  · 

April 21, 2019

by Justin Bennett  · 

April 21, 2019

EURUSD appears to be on its way to retest 1.1180 for the third time.

The single currency bounced from here earlier this month, but Thursday’s selloff looks to have extinguished the short-term bullish momentum.

At this point, my base case is for a EURUSD daily close below 1.1180.

The “daily close” refers to the New York 5 pm EST close.

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If that does occur, there isn’t much in the way of support until the November 2017 falling trend line near 1.1050.

Horizontal resistance levels are hard to come by due to the indecisive price action that has plagued the pair since this time last year.

However, last week’s highs at 1.1320 will likely attract sellers if tested.

That also seems to be the level buyers need to break to divert the momentum away from the 1.1180 level.

With all that in mind, I have to favor EURUSD selling opportunities moving forward.

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EURUSD key levels on the daily time frame

We may see GBPUSD lose ground this week.

Last Thursday’s close below the 1.3000 handle appears to have attracted sellers in the region.

But there’s another technical reason why GBPUSD may come under pressure this week.

Last Thursday’s session broke ascending channel support near 1.3050.

As long as the pair remains below this level on a daily closing basis, the pound is vulnerable against the USD.

Friday’s session also carved an inside bar, albeit by just one pip.

That inside candle hints at consolidation following Thursday’s selloff and may serve as a continuation signal.

If sellers can get behind last week’s breakdown, we could see GBPUSD trend lower toward the February lows at 1.2800.

Alternatively, a daily close back above former channel support would negate the bearish outlook.

GBPUSD upward sloping flag

We looked at GBPNZD last Thursday.

The pound cross has been consolidating since last December following the bounce from ascending channel support.

Although the situation looks the same as when I discussed the pair back in March, there are two notable changes here.

The first is that the pair is still consolidating.

That may not sound like a revelation, but when you consider that this has breakout potential, the continued consolidation is significant.

As a general rule, the longer a market consolidates, the more aggressive the breakout is likely to be.

So if you’re waiting for GBPNZD to break free, the extra wait time is a good thing.

The second development is that any break lower now has an 800-pip target rather than 600 pips which was the case in late March.

Because this is an ascending pattern, the target for a downside break grows with each passing day.

Keep in mind, though, that there are no guarantees GBPNZD will break lower.

Even though an upside break would be a surprise given the ascending nature of the recent price action, it shouldn’t be ruled out.

Either way, this terminal pattern is going to force market participants to make a decision by the end of May.

It’s also going to take a daily close beyond the wedge you see below to confirm the breakout.

The “daily close” refers to the New York 5 pm EST close.

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This is still a waiting game for now. But the longer GBPNZD consolidates, the more appealing the breakout potential becomes.

And with the prospect of an 800-pip decline, this one could be worth the wait.

IMPORTANT: I use New York close charts so that each day closes at 5 pm EST.

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GBPNZD rising wedge pattern

Last Thursday I discussed a potential CADJPY selling opportunity.

It’s a simple idea, for sure, but the rising wedge that has developed since the pair hit 81.70 in March suggests weakness ahead.

When I wrote about CADJPY on Thursday, the market was still above wedge support.

However, a few short hours later sellers produced a 4-hour close below the level.

It looks as though buyers retested former wedge support as new resistance just before the weekend.

And on Friday we saw some follow through from bears, albeit not much given the holiday weekend.

I’ll remain bearish CADJPY as long as the pair remains below the 83.80/90 region.

If this rising wedge plays out like most, we could see the pair trend lower toward the pattern’s inception point at 81.70.

CADJPY rising wedge pattern

Gold (XAUUSD) bears managed a significant break last week.

For the first time this year, gold closed the day below the 1280 support level.

You can even see where sellers defended the 1280 region on Thursday.

However, given the separation between Friday’s close and the 10 and 20 daily EMAs, another retest of 1280 resistance this week would not be a surprise.

But as long as 1280 holds as new resistance on a daily closing basis, gold is vulnerable.

As I mentioned last week, though, the confluence of support at 1260 will provide a key test for both buyers and sellers.

Any bullish price action from 1260 could trigger another run at 1280.

On the flip side, a daily close below that 1260 area could spell the end of the rally that commenced last August.

It would also expose the next key support at 1240 and perhaps 1215.

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Gold confluence of support on the daily time frame

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  2. Look at the US oil…..CAD seems resilient……I cannot see CADJPY for now plummeting until it reaches a minimum of 69.82 handle as from the weekly time frame

  3. Hi Justin.
    I just want to ask, yesterday 25.04 candle close on GBPNZD. Is that not a shooting star, bearish reversal pattern? But of course we need more confirmation 🙂

  4. Near 100 pips on GBPNZD today. I set my sl just near 1.9420, but still in big green:) A very god day 🙂 Thanks Justin!

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