Daily Price Action
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Weekly Forex Forecast (December 10 – 14, 2018)

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This week promises to be a big one for EURUSD.

Not only is there a significant Brexit vote on Tuesday, but we also have an ECB rate decision and presser on Thursday.

Although the Brexit vote will mainly target the pound, the euro won’t escape the volatility.

As always, the fundamental outcome doesn’t matter to me.

The technicals are all I need.

However, it is a good idea to know when they are occurring so you can manage any exposure as necessary.

As for the EURUSD technical picture, we have what could be a 270-pip inverse head and shoulders pattern. I mentioned it on the 3rd and again on the 7th.

So far, the euro has struggled to make progress one way or the other.

But as I wrote on Friday, that isn’t surprising given this week’s events.

Perhaps the Brexit vote on Tuesday will set EURUSD free. Or maybe the euro is waiting on Thursday’s ECB decision to make its move.

Either way, the bullish reversal pattern you see below is tentative.

It’s going to take a daily close (New York 5 pm EST) above the neckline to confirm the reversal.

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The measured objective for the pattern would be 1.1700 if confirmed.

The 1.1700 horizontal area lines up with what could be channel resistance and is also the 38.2% Fibonacci of the year-to-date range.

Alternatively, if sellers take out the November 28th low at 1.1267, it would likely negate the bullish potential and would re-expose 1.1215 support.

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EURUSD potential bullish reversal pattern

GBPUSD looks poised to continue moving sideways until Tuesday’s Brexit vote.

That was a possibility I mentioned a couple of times last week.

It’s okay by me as I have no intention of trading the pound anytime soon. The upcoming increase in volatility alone is enough to keep me sidelined.

We were also monitoring what appeared to a be a wedge pattern last week.

The lower level was range support at 1.2700. Wedge resistance extended from the November high at 1.3174.

Thursday’s session appeared to have broken free, but I’m not so sure given Friday’s pullback.

Again, it’s a non-issue for me as I have no desire to risk capital here given the events that lie ahead this week.

I’ve also made my intentions clear to Daily Price Action members.

GBPUSD is a waiting game for now. Tuesday’s vote will undoubtedly shake things up and could very well be the catalyst to set the pair free.

Until then, any pound exposure is too much of a gamble in my opinion.

GBPUSD support and resistance levels

I mentioned the possibility of a USDJPY wedge last Sunday.

The upper level was more established than the lower one, but it was still something to keep an eye on.

Buyers were tested on Thursday. The retest of wedge support near 112.30 triggered a slight bounce that carried into Friday’s session.

However, so far, that bounce looks relatively weak.

USDJPY bulls only managed to push prices higher by 70 pips following Thursday’s test of key support.

And even then, those buyers lost some momentum before the weekend.

I wouldn’t be surprised to see another retest of wedge support early this week. And if it happens, it would be a somewhat bearish sign for the USDJPY.

Multiple retests of a key level within a relatively short period of time often leads to a breakout.

Of course, that’s just speculation. As long as wedge support at 112.40/50 is intact, USDJPY has the potential to rally back to resistance at 113.80/90.

If sellers do break the 112.40/50 support area on a daily closing basis, it would expose 111.70 and perhaps 110.70.

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USDJPY wedge on the daily chart

EURCAD bulls were on the move again late Friday following Wednesday’s breakout.

I first mentioned this falling wedge on November 19th. At the time, EURCAD was trading well below key resistance.

However, the descending price action since June hinted at a topside break.

I went on to discuss this same formation on November 30th and again on December 4th.

That commentary on the 4th is where I mentioned a clue.

Here’s what I wrote:

If EURCAD marches higher this week and retests resistance, there’s a good chance we’ll see a break higher.

Repeated retests of a level often foreshadow a breakout. EURCAD would not be an exception to that rule.

The EURCAD finished that same day 60 pips higher. And by December 5th, the pair had cleared wedge resistance by nearly 40 pips.

That was the breakout I had been waiting for since the 19th of November.

Buyers didn’t waste any time taking EURCAD higher. Thursday’s session reached a session high just below our first resistance level at 1.5320.

It amounted to an impressive 160 pip single session rally.

However, the final  24 hours of last week is what I want to focus on.

Following Thursday’s retest of the area just below 1.5320, the euro cross gave up more than 200 pips.

That would be a surprise if it were any other pair.

The Canadian dollar crosses can cover a lot of ground in a hurry. EURCAD is no exception.

Now, notice where Friday’s session caught a bid. That low of 1.5100 was the retest of former wedge resistance as new support.

I even called attention to this in the member’s area.

Here’s the comment I made:

EURCAD members only comment

The fact that buyers not only held on but closed EURCAD off its session low by 80 pips is a relatively bullish sign.

As long as this new support area between 1.5100 and 1.5130 remains intact this week, all eyes will be on that 1.5320 region.

But as I mentioned last month, there’s a decent chance that EURCAD can reach the June high at 1.5580 before this is over.

That’s the inception point of this falling wedge that began in June.

EURCAD falling wedge on the daily time frame

I first pointed out this CADJPY ascending channel on October 29th.

The pair was well above support at the time, but the formation had a bearish feel to it.

However, CADJPY was in no rush.

It wasn’t until November 20th that sellers tested channel support near 84.65. And after a brief rally, bears cleared channel support on December 5th.

The first key support level following the break was 83.80/90. I pointed out this level in Wednesday’s commentary.

Sure enough, CADJPY bounced from the area on Thursday.

The buying pressure was so intense that it took the pair back to former channel support (new resistance) at 85.00.

We even saw CADJPY trade above this area for a few minutes on Friday.

However, sellers eventually stepped in and erased 50 pips from Friday’s rally just before the weekend.

That keeps new resistance at 84.90 – 85.00 intact for now.

As long as this resistance area holds on a daily closing basis, I will remain bearish CADJPY.

That key support at 83.80 will likely become a factor if tested again this week. A close below that would expose 82.30 and perhaps 80.55.

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CADJPY ascending channel breakdown and retest

Leave a Comment:

50 comments
Sumantra kumar halder says

Your analysis all time helpfull

Reply
    Justin Bennett says

    Glad to hear it, Sumantra. Have a great week!

    Reply
      OLIVER says

      Great Work Benny!

      Reply
Kenny Jay says

can you post each pair already open buy or sell signal . so we can analyst with news . How about EURNZD . i make huge profit with it . more than 900 pips . long term trade with grid trade .

Reply
    Justin Bennett says

    Sorry, no. This isn’t a signal service.

    Reply
      Maria O. says

      Am new I need a coach and a mentor.

      Reply
      Kenny Jay says

      I mean which pairs are hit support / resistance that draw with you . so i can do analyst . put it in 1 post . Like long term trade EURNZD and EURCAD .

      Reply
Paulo says

I really enjoy your analysis n it helps me alot with my trading skills … Thank u

Reply
    Justin Bennett says

    Great to hear that, Paulo. It’s my pleasure.

    Reply
Charles Williams says

Thank you boss. The analysis is a very good

Reply
    Justin Bennett says

    You’re welcome, Charles. Here’s to another great week.

    Reply
Uzoma Nnamdi says

Happy new week sir

Reply
    Justin Bennett says

    Thanks, Uzoma. Same to you.

    Reply
Volca says

Great work thank you Justine

Reply
    Justin Bennett says

    It’s my pleasure. 🙂

    Reply
Ahmed Abdullahi says

Justin this analysis is awesome.

Reply
    Justin Bennett says

    Thanks, Ahmed. Enjoy your week!

    Reply
TY says

Great job, thanks for the technical analysis. Please how can I join your members area bcuz I want to see how you trade all these pair

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Manuel says

AUD/USD ????

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Anesu says

Thank you, Justin.

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Mr fash says

Thanks Justin, I feel relieved…

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Joseph David says

Thanks for e ry rich analysis always.

Reply
    Justin Bennett says

    It’s my pleasure, Joseph. Have a great week!

    Reply
Felix says

Your analysis is wonderful and accurate in fact you are forex master.

Reply
    Justin Bennett says

    Hi Felix, glad you found it helpful.

    Reply
Alfonso Landeros says

Thank you for your good analysis!

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Onyekachi Okorie says

Thanks Justin and may God continue to give you more insight

Reply
    Justin Bennett says

    You’re welcome, Onyekachi.

    Reply
nazmul hasan says

very very helpfull analysis.

Reply
    Justin Bennett says

    Pleased to hear it, Nazmul.

    Reply
Oladimeji says

Thank you sir for all the analysis very insightful.

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Sy Ha says

Thanks you alot

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OLORUNDA ADEBISI says

Thanks Justin. You’ve been so helpful. Could you say something on gold and crude oil? That will be so helpful to me.

Reply
    Justin Bennett says

    You’re welcome.

    Reply
nilbert says

I hope this will help me. My small account is diminishing

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Bothie the ZimTrader says

Thank you Justin… Won’t the GBPUSD tank low below the 1.20000 handle seeing that there is some bit of positivism in the Brexit Deal, hence rhe strengthening of the Sterling Pound against the Greenback on Tuesday in yhe UK Parliament?

Reply
    Justin Bennett says

    As I wrote in the post, I don’t use fundamental outcomes to make trading decisions.

    Reply
OGBORO preciouslife says

Nice analysis

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Samuel says

Thanks, I enjoy your Analysis.

Reply
    Justin Bennett says

    You’re welcome, Samuel. I appreciate the feedback.

    Reply
DURING UMUKORO says

Wooh! Bro. Justin, your technical analysis are precise on chosen pairs, I’m experimenting them right now on daily time frame. I’ll tell you my results when next you come on air. Thanks

Reply
    Justin Bennett says

    You’re welcome.

    Reply
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