In this weekly Forex forecast, I’m going to show you exactly how I’m trading EURUSD, GBPUSD, USDJPY, EURJPY, and CADJPY through October 18, 2019.
Watch the video below, and be sure to scroll down for more commentary and annotated charts.
Last week was a big one for the EURUSD.
We’ve been tracking this descending channel for several weeks now.
We were also keeping a close eye on that 1.0990 resistance area last Saturday.
I wrote about the potential for a break higher from EURUSD on October 10 and even published a video.
Buyers failed to close EURUSD above the channel top on Thursday, but they got the job done just before the weekend.
From here, I anticipate that buyers will want to defend the confluence of support between 1.0990 and 1.1000 in the week ahead.
A move higher this week would first target 1.1070 with a daily close above that exposing the 1.1200 handle.
Alternatively, a close below 1.0990 would negate the short-term bullish outlook.
It would also open the door to 1.0940 and perhaps 1.0870.
The GBPUSD put in a massive false break last week.
The pound rocketed higher against the USD in the last 48 hours following the close below the 1.2290 support area earlier in the week.
It became pretty clear that buyers wanted GBPUSD higher once Thursday closed back above 1.2290 and even 1.2380.
For the week ahead, it’s going to come down to whether GBPUSD bulls can keep the pair above 1.2570.
That’s where the pair stalled out on September 20.
If they can keep prices above 1.2570 on a daily closing basis, we’ll see GBPUSD push higher this week into 1.2770.
A close above 1.2770 would expose the next key resistance level at 1.2980.
On the other hand, a daily close below 1.2570 would signal a deeper pullback into channel support around 1.2450.
I wrote about USDJPY twice last week.
The first was on October 7 when the pair was hovering just above key support at 106.80.
The second post came on Friday just before USDJPY closed above the neckline of what appears to be a 450-pip bullish reversal pattern.
I do expect sellers to defend the 108.45 area this week.
However, as long as USDJPY stays above 108.00/30 on a daily closing basis, I have to respect the potential for a move higher.
A push higher this week would first target 109.00 with a close above that exposing 110.60.
The measured objective for this inverse head and shoulders comes in just above 112.15.
Alternatively, a close below 108.00 would likely negate the bullish outlook.
I discussed this EURJPY descending channel on September 19.
We were watching for a close above channel resistance.
However, buyers failed to get the job done. Notice how the EURJPY never did close above the channel top in mid-September.
That rejection triggered a 300-pip decline, which eventually led to a higher low last week.
Thursday’s session closed above channel resistance, which certainly garnered the attention of potential buyers.
For the week ahead, key support comes in around 119.20 with key resistance just above Friday’s close at 120.00.
Be sure to watch the video above to see how this new ascending channel could assist us in the weeks ahead.
I haven’t mentioned CADJPY for some time.
The price action has been relatively choppy lately, which caused me to stay away from the pair.
But Friday’s rally changed my view on CADJPY.
As you can see, the pair broke free from a descending channel.
There is even a bullish reversal pattern similar to the one on USDJPY that could become a factor over the next few weeks.
Be sure to watch the video above for all the details.
As long as CADJPY bulls can keep the pair above the 81.20 to 81.80 support area this week, I favor a move higher.
One resistance level to keep an eye on is 83.20.
A daily close above that would expose 84.20. Keep in mind too that the objective here could be as high as 85.20, perhaps even 85.50.
Alternatively, a close back inside the channel below would negate the idea and re-expose recent lows, including the 80.00 handle.