In this weekly Forex forecast, I’m going to show you exactly how I’m trading EURUSD, GBPUSD, AUDUSD, GBPNZD, and XAUUSD through December 11, 2020.
Watch the video below, and be sure to scroll down to see the charts and key levels for the week ahead.
Last week, we looked at a possible breakout from EURUSD.
It’s an idea I’ve written about several times as far back as October 21st.
Last week’s close above 1.2010 confirmed the breakout, which triggered a retest of the 1.2150 resistance area.
Note how the pair struggled in the 1.2150 region last week.
While I still like the EURUSD higher over the coming weeks, buyers need to close the pair above 1.2150 to expose the next key resistance at 1.2330.
Key support for the week ahead comes in between 1.1970 and 1.2010.
Disclosure: I hold a long position in EURUSD.
GBPUSD experienced its most significant breakout all year last week.
In fact, I could argue that it was the pound’s most significant break in years.
The close above the 1.3340 signaled the pair’s exit from a twenty-year falling wedge pattern.
A structure like the one above usually triggers a move higher.
That’s precisely what we’ve seen from GBPUSD thus far.
Furthermore, the higher time frames appear to have carved an inverse head and shoulders since September 2018.
This is something I pointed out to Daily Price Action members in November.
If GBPUSD can get above the 1.3480 resistance area on a daily closing basis, the next stop would be the 1.3700 region.
Key support for the week ahead comes in just below 1.3400.
AUDUSD is another currency pair that broke out from key resistance recently.
I’ve liked the pair higher since the November 3rd breakout.
Just last week, the Australian dollar closed above the 0.7400 area.
We saw both Wednesday and Thursday hold above that level.
What’s intriguing is that Friday’s consolidation carved an inside candle.
Anyone familiar with the way I trade inside bars/candles knows I like to do so after a key breakout.
Last week’s close above 0.7400 certainly qualifies.
If this week can hold above 0.7400 on a daily closing basis and move above last week’s high near 0.7450, it could trigger a move toward 0.7740.
Alternatively, a daily close below 0.7400 would delay the bullish outlook.
On November 12th, I wrote about a potential short opportunity on GBPNZD.
It was a breakdown we’ve anticipated since October 26th.
Two weeks ago, GBPNZD closed below 1.90, which confirmed the breakdown.
Although buyers forced a retest of the 1.9100 area, the pair eventually closed the week below 1.9050
As long as that area remains intact as resistance on a weekly closing basis, I like GBPNZD lower.
Key support comes in at 1.8280.
Disclosure: I hold a short position in GBPNZD.
Gold (XAUUSD) may have bottomed last week.
If you saw last week’s forecast, you knew about the two channel bottoms.
One was near $1,750 while the other was closer to $1,700.
As you can see from the chart below, the former level near $1,750 attracted an influx of buyers.
That bounce may be the start of something more.
However, as I mentioned on December 3rd, XAUUSD buyers need to clear $1,850 on a daily closing basis to help confirm this bounce.
A close above $1,850 would open the door to $1,900.
That’s the top of the descending channel, which could serve as a bull flag going forward.
Although gold buyers still have work to do, I continue to favor both gold and silver much higher in 2021.