Get 40% Off
to Daily Price Action.
Ends January 31st!
In this weekly Forex forecast, I’m going to show you exactly how I’m trading EURUSD, GBPUSD, USDJPY, AUDUSD, and XAUUSD through December 20, 2019.
Watch the video below, and be sure to scroll down for more commentary and annotated charts.
The EURUSD tested a significant resistance area last week.
Friday’s candle reached the 1.1170/80 region that we’ve been discussing for several weeks now.
The long upper wick just before the weekend signals an increase in selling pressure around that zone.
However, key support for the week ahead isn’t far below Friday’s close.
The 1.1070/80 area could attract buyers this week. And if it doesn’t, ascending channel support from the year-to-date low comes in around 1.1050.
All in all, I think the EURUSD will remain a difficult pair to trade as long as the pair is below the descending channel top and above the ascending channel bottom.
I wrote about this idea on Friday.
The GBPUSD played out nicely following the December 3rd breakout.
I’ve discussed the bullish potential from this pair for several weeks now given the higher lows and higher highs.
Furthermore, the sideways action that occurred in October and November signaled strength following the 800 pip rally in October.
Last week’s rally hit our second target at 1.3340.
In fact, the GBPUSD reached as high as 1.3514 before selling off quite a bit before the weekend.
Friday’s sub 1.3340 close means the area is still serving as resistance.
Key support for the week ahead comes in at 1.3170.
The USDJPY has been incredibly indecisive recently.
Yes, the pair has managed to churn higher in recent weeks, but the price action has been choppy, to say the least.
But nothing lasts forever.
At some point, either buyers or sellers will step in to push the pair higher or lower respectively.
A move higher could materialize following a daily close above the trend line resistance that extends from the late 2018 highs.
On the flip side, bearish price action such as a pin bar or engulfing candle from the 109.70/80 area could send the USDJPY lower.
Either way, I think the recent highs and lows will tell the story. Be sure to watch the video above for more on that.
AUDUSD buyers finally broke free last week.
The bullish potential is something I wrote about on December 4.
However, after reaching our first target at 0.6930, the AUDUSD carved a bearish engulfing candle on Friday.
Whether or not that attracts additional selling pressure is yet to be seen.
If it does and the pair closes back inside this descending channel, we could see the Australian dollar continue lower.
That said, as long as the pair is above the former channel top (new support) on a daily closing basis, I have to respect the bullish potential.
Just keep in mind that even a close above 0.6930 would need to deal with the trend line that extends from the June 18 low.
The XAUUSD tested a key resistance level last week.
I wrote about the potential for a retest of the falling wedge top in the November 30th Forex forecast.
It was likely given the higher lows that have formed since mid-November.
But just like I wrote back then, buyers need to secure a daily close above the wedge top near 1480 to send gold higher.
Until then, expect this market to remain under pressure.
Key support for the week ahead comes in at 1450.