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In this weekly Forex forecast, I’m going to show you exactly how I’m trading EURUSD, GBPUSD, AUDUSD, EURGBP, and GBPCAD through October 11, 2019.
Watch the video below, and be sure to scroll down for more commentary and annotated charts.
Don’t forget to leave me a comment on YouTube to share your thoughts.
The EURUSD rallied last week from a support level I discussed last weekend.
Despite the short-term downtrend that’s been in place since late June, I wasn’t interested in selling the euro last week.
That’s because of the descending channel support that extends from the August 2018 low.
I pointed out this 1.0900 area in last Saturday’s forecast.
EURUSD confirmed my suspicion on Tuesday when the pair bounced from below 1.0900 support and rallied 120 pips back to 1.0990 resistance.
However, until the single currency can climb above the 1.0990 to 1.1015 resistance region, the currency may continue to struggle against the USD.
In my opinion, that’s the area that needs to break in order to garner attention from would-be buyers.
That same 1.0990 – 1.1015 resistance area is intact for the week ahead.
Key support remains the descending channel bottom around 1.0880/90.
The GBPUSD finished last week just above key support at 1.2290.
It’s actually a confluence of support as it’s the intersection of a key horizontal level and ascending channel support from the year-to-date low.
I talked about this 1.2240/90 support area in last Saturday’s forecast video.
I also wrote about it on September 30.
For now, the GBPUSD is holding above 1.2240/90 on a daily closing basis, which means the relief rally is intact.
However, you can see how key resistance at 1.2380 isn’t giving the pound much room to run.
Buyers struggled here on Thursday after carving a session high of 1.2413.
For the week ahead, it’s going to come down to whether or not buyers can continue to support GBPUSD around that 1.2290 area.
If they can, and if the pair can close above 1.2380, we could see GBPUSD move toward the next key resistance at 1.2370.
On the other hand, a daily close below ascending channel support would signal weakness.
It would also expose the 1.2170 support level.
I haven’t discussed the AUDUSD in quite some time.
Since the selloff that we caught in late July, the pair hasn’t don’t much, especially the period between early August and September.
That said, AUDUSD is still respecting key levels relatively well.
Notice how the pair never did close below descending channel support.
This is the same channel I pointed out in late July when the Australian dollar was trading near 0.6950.
Notice too how the AUDUSD bounced from that same channel support just last week.
Those Tuesday/Wednesday lows at 0.6670 were right on the support level, which triggered a 100-pip bounce.
That late week buying pressure carved a weekly bullish pin bar.
Be sure to watch the video above to see exactly what I mean.
That weekly signal could push AUDUSD higher this week. I also expect buyers to defend the 0.6730/40 area as new support.
However, AUDUSD buyers are going to need a daily close above 0.6800 to extend last week’s rally.
Such a break would expose the mid-September highs at 0.6880.
But as long as 0.6800 resistance is intact, the Australian dollar may struggle to garner attention from would-be buyers.
Last week, I wrote about EURGBP.
The pair has been trending lower within this descending channel since it topped out earlier this year.
If you watched last Tuesday’s video, you know I was waiting for a break above channel resistance near 0.8920 or bearish price action from the same area.
Notice how there is also a short-term ascending trend line that extends from the September low.
This week’s direction hinges on whether or not buyers can support the pair around the 0.8890 region.
That’s former channel resistance, which could now serve as support.
As of now, though, Friday’s breakout is less than convincing.
Buyers did manage to close EURGBP above the descending channel, but they also didn’t absorb the selling pressure from 0.8920 as well as I would have liked to see.
Until bulls close the pair above 0.8920, this breakout is in jeopardy.
However, a daily close above 0.8920 would open the door to the next key resistance at 0.9015 with a break there exposing 0.9090.
On the other hand, a close back inside this channel followed by a break of the ascending trend line near 0.8870 would signal weakness.
It would also expose the next key support at 0.8760 followed by 0.8680.
If you watched last Saturday’s video, you know I was watching for GBPCAD buyers to support the pair at 1.6250.
That’s the location of the inverse head and shoulders neckline.
It served as resistance starting in late July, which meant it was likely to attract buyers last week.
Sure enough, GBPCAD never did close below 1.6250 between the 1st and 2nd of October.
In fact, the move from 1.6250 support carved a 300-pip bounce.
I made a video about the potential for further gains from GBPCAD on October 2.
I said that a daily close above 1.6330 would expose 1.6430/40.
Notice how GBPCAD closed above 1.6330 on the 2nd before tagging 1.6430/40 the very next day.
However, the pair failed to close above 1.6430/40.
That led to a pullback on Friday, where GBPCAD buyers supported the pair once again at 1.6330.
So far, the inverse head and shoulders is still intact.
But the longer the pair goes without close above 1.6430/40 and moving higher into 1.6600, the more likely it is that the reversal pattern will fail.
We’ll have to see what happens this week, but 1.6330 is a must-hold level for buyers, in my opinion.