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This week’s Forex forecast includes EURUSD, GBPUSD, USDJPY, GBPCAD, and Gold (XAUUSD).
Watch the video below to find out how Justin Bennett is trading these markets this week!
Be sure to also scroll down for commentary and annotated charts.
The EURUSD played out exactly as anticipated last week.
We were watching to see how the pair would react at 1.1060 resistance. I noted that this area would attract sellers while intact on a daily closing basis.
I also discussed how 1.0930 would likely act as support.
Thursday’s session sold off from the 1.1060 region, hit a low of 1.0926, and then bounced back to 1.1063 into the 5 pm EST close.
It was a wild session, but one we were well prepared for.
For the EURUSD this week, I think it all comes down to whether or not buyers can keep prices above 1.1060 as new support.
If they can, it’s only a matter of time before 1.1100 breaks to expose 1.1200.
However, if the euro closes back below 1.1060, we will likely see the pair lose ground back toward the 1.1020 lows.
This GBPUSD breakout has played out perfectly.
Since buyers closed the pair above channel resistance on September 4, British pound bulls have been in control.
In fact, GBPUSD buyers have been in control since that September 3 bullish pin bar from support.
Last Sunday, I mentioned how I favored longs while above former channel resistance (new support).
I also pointed out last week how bulls needed to take out 1.2380 resistance.
They did that on Friday.
So, for now, that 1.2380 level becomes new support.
I still think 1.2570 is a resistance area to keep a close eye on moving forward.
It isn’t as obvious from the daily time frame, but the weekly shows it well.
Alternatively, a daily close back below 1.2380 would be a sign of weakness for GBPUSD.
It could also expose that 1.2290 level.
Our game plan for USDJPY last week went off without a hitch.
In Sunday’s video I said that I favored USDJPY longs while above 106.80 support for a move to 108.00 resistance.
The pair bounced nicely from support on Monday and reached our target level on Thursday.
Then on the 11th, I wrote that a break higher seemed likely.
Notice the second to last paragraph in my post from the 11th.
Be sure to watch the video above to see why I favored a break higher.
For the week ahead, it comes down to whether or not buyers can keep USDJPY above former channel resistance (new support) near 108.00.
If they can, we could see USDJPY move higher to 109.00 resistance.
Alternatively, a close back below 108.00 would be a sign of weakness and could even re-expose 106.80.
What a way to close out the week for GBPCAD.
This inverse head and shoulders is one I first pointed out on September 9.
I even called it a 500-pip reversal pattern.
I also mentioned that GBPCAD was nearing breakout territory less than 24 hours before it broke free on Friday.
And I still think GBPCAD buyers have more fuel in the tank.
However, as I pointed out in the video above, you probably don’t want to buy the pair at Friday’s close of 1.6600.
Just look at the price action at the end of 2018 to see why.
One area that could offer some support this week is 1.6430.
That level marks the highs from July and could attract buyers if tested.
Alternatively, a close above 1.6600 followed by a successful retest of it as new support would expose 1.6960.
Just keep in mind that the measured objective for the inverse head and shoulders below comes in at 1.6800.
Last but not least we have gold (XAUUSD).
I wrote about gold on the 10th. More specifically, I stated that this rally could be at risk below 1480.
That area marks the confluence of support for this market.
Now, notice how gold spiked higher last Thursday. That’s a perfect example of why being too early to a breakout is a bad situation.
That said, there is a reason Thursday’s session closed at 1500.
It’s something I illustrated in the members-only video I posted last week.
For the week ahead, I think a daily close below the 1480 region for gold could spell trouble for the metal.
I also think it would open up the next key support area at 1450.