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Weekly Forex Forecast (January 12 – 16, 2015)

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We have a few really nice setups and potential setups to talk about for next week, so let’s jump straight into it.

First up is GBPAUD. The pair continues to move within an ascending channel that began in September of last year. Both levels of channel support and resistance are well-defined and both are being respected on a daily basis.

It appears from last week’s close that the pair still has at least about 100 pips to go before reaching potential support at 1.8380. This level also represents an unclosed month-open gap from October of last year, so I do expect to find buyers in this area. Whether or not that buying will amount to anything significant is anyone’s guess.

Here’s a look at the current state of the GBPAUD daily chart:

GBPAUD daily forex chart

While the 1.8380 area might provide support, there’s also the possibility that a larger double top pattern is in the works. A look at the weekly chart suggests that the pair may have formed a major top at 1.9180. However it’s important to keep in mind that this is a potential double top. A close below the 1.7270 area is needed for confirmation.

GBPAUD weekly chart

GBPAUD weekly forex chart

The potential double top is of course a longer-term pattern that will take some time to play out. But there is a more immediate opportunity for a short based on the daily chart we looked at above.

As I mentioned, we have about 100 pips to go (from last week’s close) before reaching major support at 1.8380. A move down to the 4 hour chart shows a possible short opportunity at 1.8527.

Of course bearish price action at this level would be preferred to initiate a short, however this pair has been reacting so nicely at these key levels that a “blind” entry isn’t out of the question. We’ll first need to see how the pair opens next in order to know if a blind entry would make sense.

I have a small short position from 1.8640 and will most likely add to it on a retest of 1.8527.

Summary: Look to sell a retest of 1.8527. The more conservative approach calls for bearish price action before selling. Key support comes in at 1.8380.

GBPAUD 4 hour forex chart

USDZAR analysis

USDZAR daily forex chart

NZDCAD analysis

NZDCAD daily forex chart

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