Get 40% Off
to Daily Price Action.
Ends October 31st!
In this weekly Forex forecast, I’m going to show you exactly how I’m trading EURUSD, GBPUSD, USDJPY, EURJPY, and AUDJPY through January 31, 2020.
Watch the video below, and be sure to scroll down for more commentary and annotated charts.
The EURUSD broke out of consolidation last week.
It’s a breakout we’ve waited for since I wrote about this terminal pattern late last year.
You can also see what appears to be a head and shoulders pattern here.
Get Instant Access to the Same "New York Close" Forex Charts Used by Justin Bennett!
It isn’t the ideal scenario for such a pattern, but notice how similar this recent structure is to the price action in June and July of last year.
Watch the video above for the details.
Going forward, I expect to see EURUSD sellers defend the 1.1070 to 1.1090 region as new resistance.
I’ll remain bearish the EURUSD as long as the pair is below that area on a daily closing basis (using New York close Forex charts).
Key support comes in at 1.0990.
A daily close below that would expose the 2019 lows near 1.0900.
The GBPUSD is less appealing than its euro counterpart.
That’s because of the key support levels that lie just below Friday’s close.
Notice how we have a trend line that extends from the November 2019 low as well as the ascending channel support from the 2019 low.
The area between these two levels (1.2950 to 1.3015) could attract buyers on a rotation lower this week.
I also think a daily close below that channel support would be ideal.
It would open the door to lower levels, including 1.2770 and 1.2570.
Until that 1.2950 area breaks, though, the short-term GBPUSD uptrend is intact.
We’ll see if this Thursday’s BOE decision can trigger a breakout.
We looked at the USDJPY on Thursday.
In that post, I mentioned how additional losses for the pair seemed likely given the broader downtrend as well as what was occurring with other yen pairs.
On Friday, we saw the November 2018 trend line come under pressure again, just as it did on Thursday.
However, Friday’s close wasn’t convincing enough for me to call it a break.
At the same time, it certainly wasn’t a bullish end to the week.
With that in mind, I’m still anticipating a move lower from the USDJPY, especially if the pair closes below the 2018 trend line.
But as I mentioned in today’s video above, the more appealing opportunity may not materialize until the pair closes below ascending channel support.
The EURJPY confirmed our suspicions last week.
I first discussed this ascending channel on January 6th.
We also reviewed the same pattern in last week’s Forex forecast video.
Given the repeated retests of channel support, a breakdown at the end of last week was likely.
For the week ahead, I would expect sellers to defend the area between 121.00 and 121.20.
That’s the former ascending channel support, which should serve as resistance going forward.
Key support comes in at 119.20 with a close below that exposing the 2019 lows near 116.20.
AUDJPY is another yen pair that is setting up for us.
I discussed the pair on Tuesday, and whether or not the channel below would play out like the one that developed in early 2019.
If it does, we could be looking at a selloff of 300 to 400 pips.
But first, AUDJPY sellers need to close the pair below ascending channel support, which is currently near 74.20.
That would expose 73.40 and perhaps 72.50.
I also think that any rotation higher this week could encounter selling pressure at 74.80.
Note the December 3rd high and the December 18th low.
The 74.80 level also attracted sellers on October 22nd of last year.
If the other yen pairs are any indication, we could see AUDJPY move lower in the coming days and weeks.