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In this weekly Forex forecast, I’m going to show you exactly how I’m trading EURUSD, GBPUSD, USDCAD, NZDUSD, and XAUUSD through May 22, 2020.
Watch the video below, and be sure to scroll down for more commentary and annotated charts.
Another week, another round of consolidation for EURUSD.
The pair continued to pressure the 1.0770/80 support area last week, a level that aligns with the multi-year trend line from the 2000 lows.
As I’ve said for weeks, sellers need to clear that 1.0750 region on a monthly closing basis to confirm the breakdown in the multi-decade uptrend.
Of course, a daily close below wedge support shown below would also be bearish in the short-term.
Key resistance for the week ahead comes in at 1.0900.
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GBPUSD worked out beautifully for us last week.
Following the May 11th close below wedge support at 1.2360, that area became new resistance on May 12th.
The wedge pattern below and the potential for a move below 1.2360 is something I mentioned in last week’s forecast.
You can also see how GBPUSD was “leaning” on support for several days.
I talk about it in the video above, and how you can use that type of price action to determine a market’s likely path forward even before the breakout.
With GBPUSD now below 1.2200, that area becomes resistance with support coming in at 1.2000.
I wrote about USDCAD on Friday.
The way the pair has consolidated within a descending channel following the March rally looks constructive to me.
Furthermore, the USDCAD has been pushing on channel resistance while carving higher lows.
That’s indicative of an upcoming bullish break.
I could be wrong, and the 1.4130/40 resistance area could turn USDCAD lower this week.
In which case, keep an eye on 1.3850.
But if USDCAD buyers do secure a daily close above 1.4140, watch for that area to become new support.
Key resistance above 1.4140 comes in at 1.4340 and 1.4660.
NZDUSD is another one that played out perfectly last week.
I’ve said for weeks that the latest round of consolidation looked more like a continuation pattern than anything else.
Sure enough, Friday’s session confirmed my suspicions with a break below channel support near 0.5990.
We also had a bearish engulfing day on May 11th that allowed some DPA members to get short.
Don’t forget too that NZDUSD is still trading below 0.6200, which is the multi-year trend line that broke down in March.
Key support for the week ahead comes in at 0.5860, followed by 0.5650 with resistance coming in at 0.5990.
I told members last week that XAUUSD (gold) looked like it wanted to break higher.
This is something I mentioned last week too.
The wedge pattern that developed did so within an established multi-year uptrend.
That alone was a clue that the wedge structure was a continuation pattern.
Furthermore, the way XAUUSD was pushing on wedge resistance without pulling back suggested demand was increasing.
Be sure to watch the video above, where I explain this dynamic on the 4-hour time frame.
For the week ahead, 1710/20 is support with resistance coming in at 1740/50.
It’s going to take a daily close above 1750 to open the door to 1800.