In this weekly Forex forecast, I’m going to show you exactly how I’m trading EURUSD, GBPUSD, USDJPY, XAUUSD, and VETUSD through August 21, 2020.
Watch the video below, and be sure to scroll down to see the charts and key levels for the week ahead.
The EURUSD weakened on Friday after what appears to be a false break above 1.1900 between Tuesday and Wednesday.
I wrote about the potential for weakness during Wednesday’s session.
All of this comes following a 500+ pip rally that DPA members and I took advantage of starting on July 7th.
That’s when I went long.
I exited that long position last week following the daily close back below 1.1900.
I also got short last week, which I announced to members.
That short position is up just over 40 pips as of Friday’s close.
The price action between Monday and Tuesday will determine whether or not I hold the short trade for 1.1700 or lower or exit.
Update: I’ve exited the short position I mentioned above for +62 pips.
GBPUSD went from being a relatively easy pair to trade to being a complicated mess.
Last week, the 1.3160 area was serving as resistance.
That’s the area buyers had to break to send GBPUSD higher.
However, following the August 18th close above 1.3160, GBPUSD failed to hold above the area.
On top of that, the 1.3160 region didn’t serve as resistance the following session.
The back and forth price action here has made GBPUSD unfavorable.
It appears GBPUSD has now carved an upward sloping flag for the week ahead, which could trigger a move lower.
That would expose 1.2980 and perhaps 1.2800.
But as I mentioned above, GBPUSD is unfavorable at the moment.
I’ve been writing about this USDJPY wedge pattern for months.
What made this structure so difficult to trade was the fact that USDJPY wasn’t respecting it on a daily or weekly closing basis.
It took a monthly close beyond it to confirm the breakout.
That break materialized with July’s close.
However, for the past three weeks, USDJPY has gone nowhere.
This has left many wondering if July’s breakdown will hold or if USDJPY will go on to close back inside of this pattern in August.
Of course, there’s no way to know the answer to that.
What I do know is that the 106.00 area will continue to serve as resistance as long as USDJPY is below it on a monthly closing basis.
Key support remains the 101.00 area.
I’ve been bullish on gold (XAUUSD) since April 1st.
That’s when I started buying several junior gold mining stocks, which I announced to DPA members.
Nothing has changed for me. I’m still bullish on gold over the next four to five years.
In the near term, it’s going to come down to the terminal pattern below.
A close above the short-term resistance near 1970 would send XAUUSD back to 2015 and perhaps 2075.
Alternatively, a close below the March trend line near 1900 would suggest a turn lower from gold.
I’ve been writing about (and buying) VeChain (VET) since June.
At the time, VETUSD was trading near 0.008.
Fast forward to today, and the price is up over 100%.
But as I’ve stated several times recently, I don’t think VET is done yet, not by a long shot.
The entire crypto market is coming out of hibernation and is embarking on a new two-year cyclical bull market.
VeChain is perfectly positioned to benefit from that growth, in my opinion.
Looking at the technicals, VET has been consolidating for 46 days following its last 150% rally in July.
This sideways movement leads me to believe the next breakout is imminent.
A daily close above 0.022 would expose the 0.026 – 0.028 area, which would be a 50% gain from today’s price.
Over the next 18 months, though, I think VET goes much higher than that.
Disclaimer: I hold a long position in VeChain.