Daily Price Action
Shares

Weekly Forex Forecast (May 14 – 18, 2018)

Shares

Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.

Click here to get access to the same style charts I use on this website.

We looked at the EURUSD a couple of times last week. The first was on Monday when the pair was breaking below the 1.1930 handle, and the second was on Friday during the two-day rebound.

That rebound, by the way, started from 1.1830, which was one of the levels I mentioned last Sunday.

Friday’s commentary focused on whether or not buyers could close the session above 1.1930 or not. The level was a significant factor between November 2017 and January 2018, so Friday’s price action was a crucial moment for buyers.

Now, you may be wondering why I haven’t labeled 1.1930 as support or resistance in the chart below. The reason is that last week’s final print is too close to call. I like to think of key levels as areas, and Friday’s close is within the 1.1930 area.

That means the EURUSD could go either way this week. However, the uncertainty is nothing a little patience can’t cure. My guess is that we’ll have an answer to whether or not buyers cleared the 1.1930 region within the first 24 hours of this week.

For now, though, I’ll wait to see what Monday’s close brings. I’m in no hurry to trade this one, and I’m more interested in selling the Euro at higher levels than buying it down here anyway.

EURUSD key levels on the daily time frame

The GBPUSD was uneventful last week, to say the least. In fact, after five days of trading, the pair closed the week just five pips above its opening price of 1.3533.

Last Sunday I pointed out 1.3600 as the resistance level to watch. Sellers played their part well only allowing buyers to see a high of 1.3617 briefly during Thursday’s session before forcing a 1.3515 close.

That same session carved the weekly low at 1.3459, which is just two pips above the current 2018 low.

Those two levels, 1.3460 and 1.3600 give us a range to keep a close eye on for the week ahead. While I’m not interested in trading the range, I am awaiting a daily close (New York 5 pm EST) below 1.3460 or above 1.3600.

If I were forced to choose the one that’s more likely, I’d have to go with a break lower given the recent selloffs. But as always, it’s best to let the market make the first move.

A daily close below 1.3460 would expose the next key support at 1.3300. Alternatively, a close above 1.3600 would target the February and March lows at 1.3760.

GBPUSD horizontal levels on the daily chart

Despite last week’s rally attempt, USDJPY buyers weren’t able to do much with the bounce from the 108.50/80 support area I mentioned last Sunday.

They did, however, manage to retest the previous May swing high at 110.00. And if you look closely at the 4-hour chart below, you’ll notice that both rejections (the 2nd and 10th of May) carved bearish pin bars.

We had a discussion inside the member’s area on Friday about whether or not USDJPY bears had broken trend line support. At the time, it looked as though they had. However, Friday’s close tells a different story.

I’m always particularly cautious of Friday breakouts. The lack of volume compared to the middle of the week doesn’t inspire much confidence, and often results in lackluster follow through.

It’s also sometimes necessary to redraw your levels based on what the market is telling you. In the case of the USDJPY, it’s telling me that sellers haven’t broken through just yet.

As such, I’ll be keeping this one at the top of my watch list. A close below trend line support followed by a retest of the area as new resistance could offer a favorable opportunity to get short.

Key support below that comes in at 108.60 followed by 107.40/70. Alternatively, a move back to 110.00 would likely encounter an influx of selling pressure.

Want to Learn How to Swing Trade?

Click Here to Get The Ultimate Forex Swing Trading Cheat Sheet

USDJPY 4-hour trend line

The GBPJPY continues to hover just above ascending channel support that extends from the 2017 low. I’ve had my eye on this level since the pair started to break back below 150.70 on April 27. We discussed that in the April 29 forecast.

Last Sunday I pointed out the 148.50/60 resistance area. Here’s what I wrote:

Apart from 150.70, attempting to identify horizontal levels on the GBPJPY can be challenging. That said, I do believe that 148.50/60 could attract an influx of selling pressure if tested as new resistance.

Although GBPJPY bulls extended both Wednesday and Thursday above 148.50/60, the area held on a daily closing basis.

Remember, I use New York close charts that give me five 24-hour sessions in a week. You can go here to get access to the same charts I use.

So, after 120 hours of trading, we’re right back where we started last Sunday. As long as the 148.50/60 area holds as resistance on a daily closing basis, the GBPJPY is vulnerable.

However, it’s going to take a daily close below channel support at 147.20/40 to expose downside targets. More on those levels when sellers get the job done.

GBPJPY ascending channel on the daily chart

On Thursday I pointed out a multi-year ascending channel on the EURCAD. The lower boundary at 1.5200 had just come under pressure, yet buyers were still holding their ground.

Here’s what I wrote on Thursday:

As long as long-term channel support just above 1.5200 holds on a daily closing basis (using a New York close chart), the pair will remain well bid. Key resistance from here comes in at 1.5370.

However, if buyers lose the 1.5200 handle on a daily closing basis, we could see the EURCAD start to slip once more. Key support below 1.5200 comes in at 1.5000 followed by 1.4730/40.

The EURCAD closed Thursday’s session at 1.5210. Based on what I wrote above, that meant the multi-year ascending channel was still intact. Sure enough, buyers followed through on Friday, taking the pair as high as 1.5287.

This leaves us in a similar situation to that of the GBPJPY above. A retest of 1.5370/80 would attract sellers while a daily close (New York 5 pm EST) below 1.5200/30 would expose lower levels.

I’ll be keeping an eye out for either scenario. That said, a retest of 1.5370/80 would need to be accompanied by bearish price action to pique my interest.

Click Here to Get The Ultimate Forex Swing Trading Cheat Sheet

EURCAD ascending channel on the daily time frame

Leave a Comment:

24 comments
Hoa says

How is about the EURJPY?

Reply
Lovemore says

Thank you sir. Always looking forward to your refreshing analyses

Reply
    Justin Bennett says

    You’re welcome. Pleased to hear that. 🙂

    Reply
MI Lad Lj says

Thanks dear Justin good analyses

Reply
    Justin Bennett says

    My pleasure. Have a good week.

    Reply
Tjokosela Mahlomola Benedict says

I hope that my request will be under your favourite consideration.Thanks God’s will

Reply
Samuel says

Thanks Sir for this week Analysis. May God Bless You.

Reply
Gyeong-In choi says

excuse me.

In GBPJPY section,

“However, it’s going to take a daily close below channel support at 1.5200/30 to expose downside targets. More on those levels when sellers get the job done.”

1.5200/30 means 147.20/40. Right?

Reply
    Andrea says

    Yes, 1.5200 is support on EUR-CAD channel

    Reply
Soweto Born Mining Magnate says

Thank you Justin, Price Action Pope.

Reply
danish says

sir do give us gold analysis
and gbpjpy

Reply
Ibitola musbaudeen says

Well don boss

Reply
Emuobo Agbahovbe says

Hi Justin, I’m having issues with closing a profitable trade. I use the daily timeframe and I’m still unsure of where to place targets or when to move stop loss to break even.Any pointers?

Reply
    Justin Bennett says

    Be sure to search the website. There are over 100 free lessons to date.

    You can also sign up for the free swing trading cheat sheet and then purchase the $7 course that follows. I cover all of that and more.

    https://swingtrading.dailypriceaction.com/cheat-sheet

    Reply
Ch waqas says

Hy All friends and experts give me a favor please.wednesday I long USD CAD 0.18 but unlucky it’s going to Strong selling till this time.my equity only 55 then I hedge this with same loat size.now please tell what to do?so worry about it.i have any chance to recover my account and how I can do it. Please help me.

Reply
    Justin Bennett says

    If you’re worried about it, you may want to think about getting out regardless of price. The second you’re emotionally compromised, your judgment goes out the window.

    It also sounds like you’re risking too much. Take some time away from your charts and try scaling back your position size.

    Reply
Barimah Appiah says

Very good analyses. I love the premises you create and how you look forward to the pairs in the coming week

Reply
Oludare says

Justin thanks for your selfless service

Reply
Keith Plumbe says

Hi Justin, absolutely invaluable commentary – many thanks! By the way, any chance you can share with us what MA values you are using in your charts? Cheers, Keith

Reply
Abraham says

Thanks God bless u but I advice you to have BITCOIN Payment option for buyers it seems the simplest and easy way

Reply
Smart money trader says

thanks, you literally covered every pair on my watch list

Reply
Siyabonga Mkhize says

Imali thanks Justin

Reply
William says

Thank you very much.

Reply
Add Your Reply