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Weekly Trading Forecast: EURGBP, USDZAR and EURAUD

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We have a few setups and potential setups to watch going into next week, however keep in mind that the holiday should keep things fairly quiet across the market. Given the potential slow-down, it’s a good idea to lower expectations of follow-through and instead focus on the smaller moves that the market offers.

We’ve been tracking this EURGBP wedge for some time now. The pattern began forming in early September once the pair broke below the .8033 handle.

Given the recent downtrend, a break to the downside was the likely scenario. It appears that the market gave us what we were looking for with a weekly close 15 pips below support.

Speaking of weekly. The pair formed a bearish outside bar to close out the week. I can’t help but notice the similarities between this consolidation period and the consolidation that occurred in the first three months of 2012.

EURGBP weekly chart

EURGBP weekly forex chart

From here we can begin watching for a retest of former wedge support, now resistance. In fact a retest is needed in order to achieve a proper risk to reward ratio with key support just below at .7765.

Summary: Wait for a retest of former wedge support around the .7840 region and then watch for bearish price action on the 4 hour or daily time frame. Key support comes in at .7765.

EURGBP daily forex chart

USDZAR analysis

USDZAR daily forex chart

EURAUD analysis

EURAUD 1 hour forex chart

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