In this weekly Forex forecast, I’m going to show you exactly how I’m trading EURUSD, GBPUSD, NZDUSD, XAUUSD, and BTCUSD through May 15, 2020.
Watch the video below, and be sure to scroll down for more commentary and annotated charts.
The EURUSD played out perfectly for myself and DPA members last week.
I went short on May 1st when the euro was trading at 1.10, an entry I announced in the member’s area at the time.
Many took profit last week below 1.0800 based on the 4-hour wedge below as this pattern was on my radar well before Thursday’s session.
I took some profit last week, but the majority of my short remains.
If we see the EURUSD take out wedge support this week, I’ll look to add to the position.
Monday’s open will be paramount in determining whether 1.0820/30 continues to serve as support or not.
Above that area, we have the 1.0890 level.
In the broader picture, however, the future direction of the EURUSD will hinge on the multi-year trend line from the 2000 lows.
See the video above for more.
The theme for this week’s forecast is consolidation in the form of wedge patterns, and GBPUSD is no exception.
I discussed both of these levels last week.
As you can see, the short-term trend line we’ve been focused on is serving as support near 1.2360.
On the other end, the 1.2560 is likely to attract sellers on a retest.
Until the GBPUSD breaks out of this pattern on a daily closing basis, there isn’t much to do here.
A break above 1.2560 would expose 1.2900.
Alternatively, a close below 1.2360 would open the door to 1.2200 and perhaps 1.2000.
I’ve discussed the 0.6200 confluence of resistance for NZDUSD for over a month now.
It’s been a slow grind higher, but it appears we may finally get a retest of the 0.6200/50 region next week.
That’s the intersection of a key horizontal level, the trend line from the 2000 lows, and the top of a short-term ascending channel.
As I wrote last week, it’s ultimately going to take a close below channel support near 0.6000 to expose lower levels, including 0.5860 and 0.5650.
XAUUSD (gold) is another market that is moving within a wedge pattern.
It seems the market is digesting the aggressive snap-back in price between mid-March and April.
So, will it break higher?
The trend is certainly up, which suggests this is a continuation pattern.
However, at the same time, XAUUSD hasn’t experienced a meaningful pullback within the latest $300 run.
But regardless of what you or I think might happen, the market will have the final say, which is why wedge patterns like this are so useful.
A close above wedge resistance near 1720 would expose 1740/50, followed by 1800.
On the other hand, a close below the 1680 area would open the door to 1640 and perhaps 1550.
BTCUSD (Bitcoin) is something I discussed last week.
I’ve also been telling DPA members since April 12th that I have been buying Bitcoin every day, something I’m still doing now.
The price of BTCUSD was below 7,000 when I first announced that, so things are going according to plan so far.
However, in last week’s blog post, I pointed out how significant the 10,000 price is for Bitcoin.
Not only is it a psychological level, but it’s also the top of a multi-year wedge.
In my opinion, that area marks the breakout point for the next cycle that could take the cryptocurrency much, much higher.
That said, I need to see a weekly close above the 10,000 area to confirm the multi-year breakout.
Keep in mind too that Monday marks the first halving for Bitcoin in four years, so expect volatility to increase.
As for key support, keep an eye on 9400 and 8500.