Daily Price Action
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Weekly Forex Forecast (December 11 – 15, 2017)

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Important: I use New York close charts. Click Here to Use My Preferred Broker

The EURUSD dropped nearly 150 pips last week after breaking below trend line support from the November low. I mentioned this trade idea on Tuesday of last week as the pair was making its way lower.

However, Friday’s long lower wick hints at a turn higher this week. The single currency caught a bid at 1.1730, a level I hadn’t noticed until Friday’s session.

As you can see in the chart below, the area attracted buyers in late October and again in late November. Whether Friday’s signal is the start of the next leg up or just sellers taking a brief hiatus is still up in the air.

From here traders can watch for a turn higher as long as 1.1730 holds as support. Key resistance comes in at 1.1875. The area has become less influential given the choppy price action in late November and early December, but it’s still a significant region in my opinion.

Keep in mind that the long-tailed candle below formed on a Friday, so there is a question of liquidity here. Also, December is known to have less volume than that of other months, so just be cautious if you decide to trade the bullish signal below.

This Wednesday’s session features a Fed rate decision and statement at 2 pm EST. The event will affect all five of the currency pairs mentioned in this post.

EURUSD key support and resistance on daily chart

GBPUSD bulls had some trouble late last week. The bullish scenario had looked promising given the November 29 close above the 2014 trend line and the December 7 bullish candle that followed.

But Friday’s departure from the bullish momentum is worrying if you’re a bull. That said, the pair is still holding above the confluence of support at 1.3320/40. As long as this area holds on a daily closing basis, the 1.3640/50 resistance area remains exposed.

Given the somewhat conflicting candles in the final 48 hours of last week, I’m going to stay on the sideline for now. If we get some bullish price action at 1.3320/40 this week, I will entertain a long entry.

GBPUSD confluence of support

Unlike the USDCHF, which we’ll discuss next, the USDJPY looks relatively bullish. Buyers managed a 113.44 close on Friday, putting the pair back above the 113.15 pivot that we have discussed several times in recent weeks.

Any bullish price action on a retest of the 113.15 area could present a buying opportunity. Keep in mind that we will likely see some selling pressure at the channel top near 114.00.

Although not yet tested on both ends, the mid-October and late November swing lows hint at a possible descending channel. See this lesson to learn how I use potential patterns like this to spot future support and resistance levels.

As long as 113.15 holds as support on a daily closing basis, the 114.00 area remains exposed. A daily close above that would pave the way for a move toward the multi-month range top at 114.35.

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USDJPY daily time frame

The USDCHF hit our first target last week at 0.9940. It came just 48 hours after buyers closed the pair above the confluence of resistance at 0.9850.

I mentioned this trade idea on both Monday and Tuesday of last week. The latter focused on watching for a buying opportunity on a retest of 0.9850 as new support with an initial target at 0.9940.

Shortly after that commentary, the pair carved a session low of 0.9855 on December 6. By Thursday, USDCHF bulls had retested the 0.9940 resistance level.

But by Friday’s close, those same buyers retreated back below 0.9940 leaving a bearish pin bar in their wake.

Friday’s signal hints at a turn lower to start the new trading week. Similar to the EURUSD above, whether or not this pin bar implies the beginning of a more significant move is unclear at this time.

What we do know is that sellers are out in force above the 0.9940 handle. So as long as this level holds as resistance on a daily closing basis, a return to 0.9850 or at least 0.9880 seems likely.

USDCHF bearish pin bar on the daily time frame

The USDCAD is a perfect example of why using New York close charts is essential. Although the December 4th and 5th sessions slipped below range support at 1.2670, buyers stepped in to close the pair back above the level before 5 pm EST.

We looked at this range last weekend as well. In that commentary, I pointed out how a close above the range top or below the bottom would trigger a breakout opportunity.

At the time I was favoring a break lower given the velocity of the December 1 selloff. The fact that sellers didn’t even hesitate before last weekend didn’t leave much room for a bullish conviction.

It now seems that the USDCAD could go either way given Wednesday’s 96 pip gain that puts the pair right in the middle of this 240 pip range.

I was on the verge of mentioning Tuesday’s bullish rejection candle but decided to hold off and post about the USDCHF instead. In hindsight, I probably should have written the commentary, but the upper wick was a bit too long for my liking.

Both options (USDCHF or USDCAD) worked out nicely last week. As for the USDCAD, we now need a break from the current range. That is unless you decided to trade Tuesday’s long-tailed bullish rejection candle that formed at 1.2670 support.

For those of us still on the sideline, it’s going to take a daily close (5 pm EST) above 1.2910 to spring buyers free. The next key resistance above that comes in at 1.3160, giving traders 250 pips to work with.

Alternatively, a daily close below 1.2670 would expose the next key support at 1.2420. That said, given the recent break above descending channel resistance on the U.S. Dollar Index (DXY), I have to favor the upside here.

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USDCAD range on daily chart

Leave a Comment:

21 comments
Yemi ojo says

Can this analysis work with any forex broker?

Reply
    LaideOlowookere says

    The brokers do not run the market. You should know the market is an independent stand alone operation of its own so as long is the same currency you are looking at then the analysis will work.

    Reply
      Justin Bennett says

      There’s nothing wrong with the question. Everyone has to start somewhere. In fact, it’s a valid question considering not all brokers offer New York close charts.

      Reply
    t says

    yes

    Reply
    Justin Bennett says

    Yes and no. You can trade with any broker, but not all offer New York close charts, which is what I use.

    See here if you need New York close charts: https://www.blueberrymarkets.com/lp/dailypriceaction

    Reply
      Dita says

      thank you mr..
      this is my phone number, if want know my profile can save my phone number, and chat at whattshap…thank you

      Reply
        Dita says

        thank you mr..
        this is my phone number 085265096512, if want know my profile can save my phone number, and chat at whattshap…thank you

        Reply
Anetor Ibikunle says

Thanks Justin for this Comprehensive Analysis.

Reply
    Justin Bennett says

    You’re welcome. Cheers.

    Reply
Nelson says

Justin …

Appreciate your thoughtful and non complex analysis

All good and thanks

Nelson

Reply
    Justin Bennett says

    Anytime, Nelson. Thanks for the feedback.

    Reply
Nsa says

great analysis, thanks

Reply
    Justin Bennett says

    You’re welcome.

    Reply
kamorudeen says

pls try to use metatrader 4 brokers is working well

Reply
    Justin Bennett says

    Sorry, I don’t understand. I do use MT4.

    Reply
King says

Thanks Justin.

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Johnking Osamagbe says

thanks for the heads up
Pls send me your whatsapp number

Reply
Selwyn says

HI Justin,

Would you be able to recommend a good broker for Canadian Traders?

Reply
Hector says

Gracias por sus análisis

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