In this weekly Forex forecast, I’m going to show you exactly how I’m trading EURUSD, GBPUSD, USDJPY, EURCAD, and XAUUSD through December 27, 2019.
Watch the video below, and be sure to scroll down for more commentary and annotated charts.
The EURUSD has struggled at 1.1170/80 resistance in recent weeks.
We saw the bearish pin bar form on the 13th and the subsequent selloff that materialized with the December 17 retest of 1.1170/80.
However, I do expect to see some buying pressure develop early this week around that 1.1070 support region.
That’s where the EURUSD closed on Friday.
But the recent price action does point to a lower euro, at least that’s the probable outcome while the pair is trading within the descending channel below.
A daily close below ascending channel support near 1.1050 could be the start of the next leg lower.
Alternatively, a close above 1.1180 followed by one above the channel resistance near 1.1200 would turn our attention higher.
The GBPUSD sold off from a significant area earlier this month.
The 1.3340 region is also one that I’ve pointed out several times recently, including the December 3rd analysis when the pair was breaking out.
You’ll also notice that 1.3340 is a confluence of resistance as it’s the intersection of a key horizontal level and ascending channel resistance.
Because of how aggressively the GBPUSD came off of that resistance area last week, it did look as though a retest of 1.2980 was inevitable.
In fact, that’s exactly what I told Daily Price Action members.
From here, it’s going to come down to what happens at the former range top at 1.2980.
A daily close below it would expose the confluence of support at 1.2770.
Key resistance for the week comes in at 1.3170.
The USDJPY hasn’t been all that appealing lately.
However, the pair is coming into a resistance area around 109.50/60 that could trigger a setup over the coming sessions.
The trend line below extends from the November 2018 highs.
As for support, it seems that 108.40 will be the horizontal level sellers need to break to send the USDJPY lower.
I’ll be keeping a close eye on the swing highs and lows going forward.
Up until now, the pair has been carving higher lows and higher highs.
But any weakness here could be foreshadowed by the formation of lower highs and lower lows.
Alternatively, a daily close above the trend line near 109.60 could take the USDJPY higher.
The EURCAD broke a key support level last week.
I wrote about the pair on Wednesday, noting that a daily close below support could send the pair lower.
We got that close on Wednesday, and you can also see how the 1.4620 area attracted sellers on Thursday and Friday.
As long as EURCAD is below this short-term ascending channel, I do favor a move lower, perhaps toward the 2019 lows around 1.4430.
Alternatively, a daily close back inside the ascending channel would indicate a false break.
I’ve written about the XAUUSD (gold) a few times in recent weeks.
The falling wedge pattern below could be indicative of a continuation pattern.
In other words, it could trigger a move higher for XAUUSD.
That’s especially true when you combine the recent wedge pattern with the massive rally from earlier this year.
That said, it’s going to take a daily close above the confluence of resistance at 1480 to expose the next key resistance at 1515.
Just keep in mind that we could still see a rotation lower.
Key support for the week ahead comes in at 1450.