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In this weekly Forex forecast, I’m going to show you exactly how I’m trading EURUSD, GBPUSD, USDJPY, EURAUD, and XAUUSD through October 23, 2020.
Watch the video below, and be sure to scroll down to see the charts and key levels for the week ahead.
The EURUSD hasn’t moved much in recent days.
The lack of momentum and key levels has kept me away from the pair lately.
However, I continue to like the idea of a final push into the 1.1450 region before the next leg higher can materialize.
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A look at the monthly time frame illustrates why that’s my base case scenario (see the video above).
That means we could see the EURUSD weaken further toward 1.1615.
A close below that would expose the critical support region between 1.1450 and 1.1500.
The GBPUSD has become unfavorable as well following the close back below the 1.3000 region.
It looked like buyers wanted to take prices higher following the close above that area, but it wasn’t meant to be.
For now, I’m going to leave GBPUSD alone.
We may need to see a rotation lower before the monthly chart’s bullish pattern can take hold.
I wrote about this USDJPY structure on October 9th.
The lower highs since February hint at continued weakness, perhaps back toward 104.20.
But despite breaking below a short term trend line on October 12th, USDJPY has yet to produce much.
That’s been a consistent theme for the entire market.
That said, if 105.60 holds and the USDJPY continues to produce lower highs, we’ll see another run at 104.20.
It’s going to take a close below that to open the door to the next key support at 101.00.
The EURAUD, along with many other markets, has been sideways for months.
My guess is that markets as a whole will continue to be indecisive until after the US elections in November.
For that reason, I’ve scaled back on my trading.
But one pair I am keeping an eye on is EURAUD.
The pair’s indecision since June has carved a well defined sideways channel.
Support comes in near 1.6100 or just above with resistance at 1.6570.
What’s important here is whether you trade the channel or wait for the breakout.
While that’s entirely up to you, I will say that this channel has been in place for months, which indicates that it may not hold much longer.
If that’s the case, it may be better to wait for the breakout.
On top of that, notice the recent higher low from earlier this month.
That may be indicative of an imminent close above the 1.6570 area.
If EURAUD bulls can clear 1.6570 on a daily closing basis, it could open the door to higher prices, such as 1.7000.
That would be my target following a breakout above 1.6570.
Just remember that there are no guarantees, and breakouts do fail.
For now, though, it’s all about whether buyers can clear 1.6570 to open the door to the 1.70 region.
If they can’t, I’ll be watching for a move down to 1.6100 followed by a break below that level.
It looked like gold (XAUUSD) wanted to break out recently, but buyers couldn’t hold prices above the 1910 region.
It now looks like we have a smaller structure in play where the upper level extends from the August 18th high.
Given last week’s failure to push higher, we could see a retest of 1850 this week.
But even a close below 1850 wouldn’t negate the bullish outlook.
It would only open the door to the 1790 support level.