Daily Price Action
Shares

Weekly Forex Forecast (July 24 – 28, 2017)

Shares

The EURUSD surged higher last week breaking above the 1.1610 handle. This is the May 2016 high which resides between 1.1610 and 1.1615 depending on your broker.

For the week ahead, any rotation back to the 1.1610 area will likely attract buyers. Resistance lies just above Friday’s close at 1.1710 which is the August 2015 high and a significant range top.

As long as the 1.1490 support level holds on a daily closing basis, my bullish bias is intact. Only a close below this area would suggest that buyers are tiring and a reversal is imminent.

However, the more likely scenario is a continuation of this year’s rally. To do that, buyers will need to secure a daily close above the 1.1710 handle. Such a close would expose the 2010 low at 1.1875.

Want to see how we are trading these setups? Click here to get lifetime access.

EURUSD daily chart

Unlike its Euro counterpart, the GBPUSD lost ground last week. Although the pair is up nearly 800 pips for the year, the look and feel of the rally appears to be more corrective than that of the EURUSD. In other words, the pound sterling has struggled relative to the single currency.

At the moment, the 1.2970 area appears to be luring a few buyers. The region attracted a decent bid between Thursday and Friday of last week. It appears I was off by 10 pips as the area I had marked last week was 1.2980.

One level that was spot on from the last weekly forecast is the 1.3100 resistance area. We discussed the level last weekend and sellers didn’t disappoint. In fact, they won every battle last week except Friday’s marginal rebound.

For the week ahead, a daily close below the 1.2970 area would expose the next key support level at 1.2770. This area served as a key pivot between December 2016 and June of this year.

It’s going to take a daily close above 1.3100 to extend the 2017 rally. Such a close would pave the way for a move toward the 1.3250 handle.

GBPUSD daily chart

On July 14th, USDJPY bulls lost the 113.15/25 handle. I mentioned this in the last weekly forecast and also pointed out that any retest of the area would likely attract an influx of sellers.

Though the pair never quite retested 113.15/25, sellers did retake control last week. The total damage was approximately 130 pips from Monday’s open to Friday’s close.

Just like the Friday finish from two weeks ago, USDJPY bulls gave up yet another key area at the end of last week. The 111.70/85 region has directed price action since February and with Friday’s close of 111.11, any retest in the coming week will likely attract sellers.

To the downside, the next key support doesn’t come in until 110.30. The area served as support between March and May before flipping to resistance in mid-June. A close below that would expose the June lows near 109.30.

Want to see how we are trading these setups? Click here to get lifetime access.

USDJPY daily chart

The AUDUSD has been an interesting pair to watch over the past few weeks. The bulls have no doubt regained control, and just last Wednesday they secured a close above the confluence of resistance at 0.7940.

This area is the intersection of the March 2015 high and ascending channel resistance from the February highs from earlier this year. We even saw buyers hold the price above 0.7940 on Thursday following Wednesday’s close above it.

However, it appears that buyers failed to hold their ground ahead of the weekend. Friday’s close at 0.7910 suggests that Wednesday’s bullish break may have been a false move.

If this is the case, I suspect that any retest of the 0.7940 area in the coming week will attract sellers. Key support comes in at 0.7830 followed by 0.7740.

AUDUSD daily chart

The EURCAD continues to be one of my favorite pairs at the moment due to the favorable technicals that have been forming since early June. In fact, the one level that has been most influential extends as far back as December of 2015.

We’ve discussed the Euro cross several times in recent weeks. The first mention of a possible bearish shift in sentiment came in the July 7th commentary.

Shortly after I published that commentary, the pair closed below the December 2015 trend line. And as expected, buyers stepped in near the unfilled gap from April 24th at 1.4460/80.

As long as the price remains below 1.4680, I’ll stay cautiously bearish. The reason I can’t commit to a full-tilt bearish bias is due to the ascending channel from the May/June highs. Whether or not the pattern is corrective and therefore bullish is anyone’s guess, but it certainly can’t be ruled out.

Also, it’s no secret that the Euro has been strong so far in 2017. So for the EURCAD to continue its descent with a close below 1.4460/80, the Euro either needs to weaken, or the Canadian dollar needs to become relatively stronger, neither of which appear to be an easy task at the moment.

But again, it’s going to take a daily close above 1.4680 to negate the bearish outlook and re-establish the bullish narrative. Until that time comes, I’ll be on the lookout for selling opportunities.

Want to see how we are trading these setups? Click here to get lifetime access.

EURCAD daily chart

Leave a Comment:

6 comments
Darius says

“As long as the 1.1490 support level holds on a daily closing basis, my bullish bias is intact. Only a close below this area would suggest that buyers are tiring and a reversal is imminent.”

Why do you think it necesarily has to be reversal? Maybe it can be not up nor down for a while? Be in some range I mean.

Reply
    Justin Bennett says

    It doesn’t “have” to be anything. I work with probabilities and a close below 1.1490 would likely break the trend from the April lows.

    Reply
Ryan Guderian says

Really appreciate the analysis! I agree completely with all of it.
EURUSD does show some signs of an early week correction so I shorted just before the weekend. 4h TF shows what could be an evening star forming and my target is low 1.15 region and SL 1.173. Any signs of bullishness from there and I am back long until 1.18.

Reply
Tony Martin says

What about the giant weekly pinbar on AUD/JPY. Tell everybody to sell. lol.

Reply
Tony Martin says

I Totally agree with the EUR/CAD analysis too. In fact I have it written down in my journal with a similar outlook.

Reply
Tony says

So. Still no mention of the giant weekly pinbar on AUD/JPY.
What’s wrong, do the fundamentals not match up with the technicals?
Either you are confident in and trade pinbar setups or you are confused!

Reply
Add Your Reply