In this weekly Forex forecast, I’m going to show you exactly how I’m trading EURUSD, GBPUSD, USDJPY, USDCAD, and EURGBP through March 6, 2020.
Watch the video below, and be sure to scroll down for more commentary and annotated charts.
The EURUSD put in a big move last week.
I mentioned the potential for a bounce here in last weekend’s forecast.
The test of that descending channel near 1.0780 is something I discussed on February 13th.
As you can see, that channel is still directing the price action for the EURUSD.
With the pair now above the 1.0990 key level, we could see a run at 1.1080 this week, and perhaps a test of that channel top near 1.1170/80.
Just keep in mind that Monday’s open will be critical.
All in all, though, I have to stay bullish in the short-term while the pair is trading above 1.0990 on a daily closing basis.
Remember that I use New York close charts so that each day opens and closes at 5 pm EST.
Go here to get access to the same Forex charts I use.
Only a close below that level would suggest weakness and open the door to the 2019 lows near 1.0900.
The GBPUSD finally reached 1.2770 support last week.
I discussed the potential for a move lower from 1.3050 in the February 16th weekly forecast.
I also wrote about the likelihood of a move to 1.2770 on February 19th.
It took longer than anticipated, but the GBPUSD tested 1.2770 support on Friday.
Given the way the pair bounced intraday, it’s pretty clear that 1.2770 is, in fact, a significant level for the pound.
However, the GBPUSD still closed the day, week, and month below 1.2870.
Notice how that level supported the pair throughout February, until the last day of the month that is.
For the week ahead, it’s going to take a daily close below 1.2770 to open the door to the next key support at 1.2570.
Alternatively, any retest of the 1.2870 region will likely attract sellers.
The USDJPY confirmed a massive false break last week.
Buyers confirmed the bullish breakout on the daily and weekly time frames last week, but it didn’t last.
One big clue was the velocity of last week’s pullback.
I’ve mentioned the importance of “rounded retests” in the past, and last week’s retracement was anything but round.
The aggressive pullback hinted at the possibility of a false break situation, which is why I wrote the February 25th commentary.
The key takeaway from that post was that a daily close below 109.80 would confirm the false move and send the pair lower.
Sure enough, Thursday’s close gave us just that, and sellers followed through on Friday.
With the USDJPY now below the channel bottom, all eyes are on 106.80, followed by the multi-year wedge support between 105.50 and 106.00.
Alternatively, a push higher this week into the area between 109.00 and 109.50 would likely attract sellers.
The USDCAD broke free from a confluence of resistance near 1.3300 last week.
I mentioned the breakout in the member’s area on Wednesday and how the area just above 1.3300 was new support.
Thursday’s session gave us a low of 1.3316 before rocketing 150 pips higher.
The upper wick on Friday’s candle illustrates the profit-taking that occurred before the weekend.
Note that Friday was also the last trading day of February, so late-session moves like this are pretty standard.
Whether or not USDCAD catches a bid this week from the 1.3380 level or not is up in the air.
We could see the pair retest that 1.3300 support area first, or march higher (no pun intended) toward the next key resistance at 1.3530.
Like the other pairs in today’s forecast, the first 24 hours will be telling.
I’ve been discussing a potential EURGBP bottom since January 31st.
I mentioned it again on February 19th.
As you can tell from the chart below, buyers are doing their part to make that idea a reality.
Not only did EURGBP take out the confluence of resistance at 0.8460 on Thursday, but the pair also closed above 0.8590 on Friday.
Or so it seems.
There isn’t much room between Friday’s close and that 0.8590 key level, which means Monday’s open will be critical.
Not only that, but the first 24 hours of the new week should tell us if we’ll get a deeper pullback first or if 0.8590 will hold as new support.
Either way, I’m staying bullish the EURGBP while above 0.8460.
And as I’ve mentioned in recent members-only videos, I like the EURGBP toward 0.8800 and perhaps even 0.8900 in the coming days and weeks.