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In this weekly Forex forecast, I’m going to show you exactly how I’m trading EURUSD, GBPUSD, NZDUSD, EURGBP, and GBPCAD through February 14, 2020.
Watch the video below, and be sure to scroll down for more commentary and annotated charts.
Last weekend, I discussed the significance of Monday’s open.
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Because the January 31st rally occurred on a Friday, and at the end of a month, I wanted to see how Monday opened before making a decision.
More specifically, I stated that a gap down would signal weakness.
That statement applied to both the EURUSD and GBPUSD.
Sure enough, the euro and pound both gapped lower to start last week, which signaled weakness.
I also wrote about EURUSD on February 6th when the pair was testing the 1.0990 key level.
We were watching for a break below that level, which would target 1.0940.
Thursday’s 1.0980 close confirmed the breakdown, and Friday’s session reached a low of 1.0941, just one pip above the level I mentioned.
That 1.0940 support level could be a factor early this week.
However, I will continue to look for shorts here while the pair is below 1.0990 on a daily closing basis.
A daily close below 1.0940 would expose 1.0900.
GBPUSD played out perfectly for us last week.
On Wednesday, I announced my short position from 1.3044 in the member’s area.
I remain short GBPUSD going into the new week.
As I mentioned a few times last week, the first key support following the recent breakdown comes in at 1.2770.
It’s going to take a close below that to expose 1.2570.
As long as the area between 1.2980 and 1.3000 is intact as new resistance on a daily closing basis, I favor GBPUSD shorts.
The “daily close” refers to 5 pm EST when using New York close charts. Go here to get access to the Forex charts I use.
Given the price action over the last few months, I wouldn’t be surprised to see a move down to 1.2570 or even 1.2380 over the coming weeks.
I wrote about NZDUSD on February 7th.
In that post, I discussed how a daily close below 0.6435 would expose the next key support at 0.6320 this week.
The NZDUSD closed below 0.6435 on Friday.
That means the 0.6435 area will likely attract sellers if tested as new resistance this week.
Of course, there are no guarantees we will see a retest of that level first.
Given the recent weakness here, we could see NZDUSD sell-off immediately this week toward that 0.6320 region.
Regardless, I’ll continue to favor shorts while below 0.6435 on a daily closing basis.
The EURGBP has been my most controversial idea so far in 2020.
I wrote about a potential bottom here on January 31st.
At the time, the EURGBP was trading near 0.8390 or about 100 pips below Friday’s closing price.
I then discussed the February 3rd close above the 0.8450 key level, which was likely to serve as support going forward.
Last but not least, I wrote about 0.8450 serving as new support on February 5th.
I still hold a EURGBP long position from January 31st, which I added to during last Wednesday’s dip below 0.8450.
However, I still think it’s going to take a daily close above 0.8590 to confirm the bottom that’s in progress.
Be sure to watch the video above where I point out a short-term channel that could offer a breakout opportunity this week.
Key support remains 0.8450.
The GBPCAD boasts what is arguably the best-looking chart this week.
I discussed the pair’s counterpart (EURCAD) on Thursday, noting how the 1.4600/30 area would likely serve as new resistance following the recent false break.
The EURCAD reached a high of 1.4613 on Friday before sliding 60 pips lower.
As for GBPCAD, the rising broadening wedge in the chart below hints at a move lower in the coming days and weeks.
I wrote about this wedge pattern just before the weekend.
If you read that post, you know that it’s going to take a daily close below the 1.7050/90 area to open the door to 1.6830 and perhaps 1.6600.
But given what could be a lower high coupled with this broadening wedge, a break lower does seem imminent, in my opinion.
I’m already short GBPCAD from 1.7224, an entry I posted in the Skype group I run for higher net worth traders.