Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
EURUSD closed back above the 1.1110 handle last week.
I discussed this level last Sunday as one that would likely serve as resistance.
You can see how Monday and Thursday both stalled right at 1.1110 before selling off into the close.
But despite those selloffs, I was never interested in selling EURUSD.
The single currency has been incredibly indecisive this year. It has also produced the most false breaks of any currency pair as far as I can tell.
Furthermore, I don’t sell markets that hover just below a resistance level as it indicates a stalemate between buyers and sellers.
That was certainly the case here.
We also saw a higher low develop last week that indicates increased demand above the 1.1030 area.
However, I still think the pair needs to clear the trend line I pointed out on the 13th if it intends to push higher this week.
All in all, the EURUSD remains a challenging and somewhat unfavorable pair to trade, in my opinion.
If you are going to trade it, though, it may be a good idea to wait for a break above the trend line in the chart below.
That would likely attract buyers and expose the 1.1280 area I wrote about earlier this month.
On the other hand, a close back below 1.1110 would keep sellers in control.
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Last Sunday I wrote about how the 1.2100 area would likely attract buyers for GBPUSD.
The pair closed above the level on Friday the 16th and retested the region as new support between the 19th and 22nd.
I wrote about the possibility of a bounce from 1.2100 on the 20th.
Sure enough, buyers stepped in to drive GBPUSD higher by 180 pips following the test of 1.2100 support.
But GBPUSD buyers aren’t out of the woods just yet.
In fact, this week’s test of channel resistance may be the most significant yet.
If buyers can get past that, it’s on to the July 17th low at 1.2380 with a close above that targeting 1.2560 followed by 1.2770.
On the other hand, rejection from 1.2300 resistance could take the pair back to 1.2180.
The risk-sensitive USDJPY looked poised for a move higher last week.
However, buyers never cleared the 106.80 resistance level on a daily closing basis.
Instead, sellers came out in force on Friday to drive the pair 100-pips lower.
This sets up a retest of the 105.00 support area for the week ahead.
But the more significant support level here, in my opinion, is descending channel support near 104.70.
As long as that area holds as support, I think shorting USDJPY is a risky endeavor.
At the same time, I don’t want to buy the pair given the bearish price action of late.
This is a stalemate for me.
I would rather see how USDJPY reacts to the 104.70 – 105.00 support area before making any considerations.
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I wrote about EURGBP twice last week.
The first was on the 19th when it looked as though a top was in place.
My base case following that commentary was for a break below 0.9090.
I wrote about EURGBP a second time on the 22nd as the pair was in the processing of closing below that key 0.9090 support level.
But despite coming under pressure last week, sellers were unable to clear the mid-July highs near 0.9040.
Still, as long as 0.9090 holds as new resistance, I favor selling EURGBP for an eventual retest of the 0.8915 region.
Alternatively, a close back above 0.9090 would turn our attention higher toward the next key resistance near 0.9180.
GBPAUD appears to have cleared a key level at 1.8140 on Friday.
You can see how this area served as key support for the pair in April and June before flipping to resistance on August 7th.
Buyers challenged this level on Thursday and closed the pair above it before the weekend.
From here, I want to see buyers defend 1.8140 as new support.
If they do and we see bullish price action such as a pin bar, it could indicate that GBPAUD wants to retest the next key resistance at 1.8400.
Alternatively, a daily close back below 1.8100 would suggest a false break. It would also expose the next key support near 1.8000.
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