In this weekly Forex forecast, I’m going to show you exactly how I’m trading EURUSD, GBPUSD, EURJPY, EURNZD, and XAUUSD through January 24, 2020.
Watch the video below, and be sure to scroll down for more commentary and annotated charts.
The EURUSD ended last week at a critical support area.
We have discussed this region between 1.1070 and 1.1080 for weeks now.
Notice how it’s the intersection of a key horizontal level that dates back to July of last year and ascending channel support from the 2019 low.
That means EURUSD sellers need to close the pair below this area to expose lower levels.
One such level is 1.0990.
But it all hinges on the confluence of support at 1.1070/80.
As long as that area is intact as support, attempting to sell the EURUSD may not be the best idea.
Be sure to watch the video above for all the details.
Key resistance for the week ahead comes in at 1.1200, which is the top of a descending channel that began last January.
The GBPUSD ended the week with a bearish engulfing pattern.
I discussed this signal and the November 2019 trend line you see below on Friday.
From the way GBPUSD finished out the week, a rotation lower this week wouldn’t surprise me.
However, sellers have to deal with a couple of critical support areas first.
That 1.2980 support region won’t be easy to crack.
I can say the same for ascending channel support that extends from the 2019 low.
For this reason, I think GBPUSD sellers need to be careful, at least until we see GBPUSD close the day below some of these support areas.
The EURJPY could be one to watch over the coming weeks.
That’s especially true if we see the euro continue to weaken.
I’m mostly interested in an eventual close below ascending channel support, which comes in near 121.00.
Such a break would expose lower levels including 119.20.
For the week ahead, the 122.60 region could continue to attract sellers.
However, I’m not interested in selling up here without some type of bearish signal, such as a pin bar or engulfing candle.
The EURNZD looks appealing for the week ahead.
We have a couple of things occurring here.
The first is the short-term ascending channel you see in the chart below.
A daily close below channel support would signal weakness and also expose the next key support around 1.6560.
The second factor on the EURNZD formed on the weekly time frame.
I mentioned it in the video above, but the bearish pin bar on the weekly time frame hints at continued weakness for the pair.
Furthermore, the 50% retracement of that weekly pin bar (between 1.6800 and 1.6830) could offer a short entry this week.
The XAUUSD has spent the majority of 2020 consolidating.
But that shouldn’t come as a surprise to frequent visitors to this site.
We know gold is coming off an incredible run that materialized with the December 23rd close above the confluence of resistance at 1480.
Our targets for that move included 1515 and 1550.
XAUUSD reached both targets within days of breaking out.
So, some consolidation up here is expected.
Many of you have been asking for an update on gold, which is why I’m including it in today’s forecast.
See today’s video for all the details.
To be honest, though, I don’t see much to do here.
I also think pairs like EURUSD and EURNZD could offer better opportunities in the near term.
That said, if we see XAUUSD close above recent highs near 1560, we could see another run at the 1580 resistance area.
Alternatively, a move below 1535 would open the door to 1515.