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Weekly Forex Forecast (May 7 – 11, 2018)

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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.

Another week is behind us, and another support level is broken on the EURUSD. Sellers have made a habit of this since the single currency broke long-term wedge support on April 20.

Last Monday’s session broke the 1.2090 support level I mentioned on the 29th. The breakdown exposed the next key level at 1.1930 which is a level I pointed out in the previous forecast.

As expected, we saw some buying pressure at 1.1930 just before the weekend. Whether we get a sustained bid to start the week is anyone’s guess, but I’ll stay bearish as long as 1.2090 holds as resistance on a daily closing basis.

In fact, even if buyers were to overcome 1.2090, the April 20 close below wedge support is enough to keep me bearish for quite some time.

Below 1.1930 we have 1.1830 followed by 1.1710. However, I am anticipating a relief rally to materialize at some point. Whether it occurs at 1.1930 or 1.1830 is unknown, but I’ll stay patient and wait to sell on strength.

EURUSD key levels on the daily chart

Similar to its EURUSD counterpart, the GBPUSD ended Friday’s session with a three-week losing streak. Unlike the Euro, though, the pound began its descent with a bearish engulfing week. I mentioned the pattern in the April 22 weekly forecast.

Since the April 17 swing high, the pair is down a massive 840 pips. And if we treat the highs from January 25 and April 17 as a double top, we’re looking at a move to 1.3200 over the next few weeks.

We get that from the 580 pip range between 1.3760 and 1.4340. Measuring 580 pips below the 1.3760 pivot gives us 1.3180, or 1.3200 to be a tad conservative.

However, keep in mind that sellers need to get through 1.3300 support first. I do expect quite a lot of buying pressure to materialize in this area if tested.

As for resistance, the GBPUSD closed last week below the 1.3600 area. You can see how this region capped advances in September of last year and January of this year.

Speaking of last year, note that 1.3494 was the 2017 close. It’s no coincidence that the pair bounced from this area just before the weekend.

I’m going to stand aside for now. I would be interested in selling on strength, but at the moment the 1.3600 resistance level and the 2017 close at 1.3494 acting as support don’t allow for a favorable risk to reward ratio.

gbpusd daily chart

I posted an intraday chart of the USDJPY in the member’s area on Thursday showing an upward sloping flag that had developed. As you may well know, it’s an exhaustion pattern that suggests an imminent reversal.

At the time the pair was trading at 109.40. Just 24 hours later the USDJPY carved a low for the week at 108.64, resulting in a drop of 76 pips.

The support level I pointed out to members was 108.50. While sellers didn’t quite retest the level on Friday, the bounce from 108.64 was undoubtedly a result of the lows that developed between late January and early February.

usdjpy 1-hour chart

However, if we draw a trend line from the March lows, we can see how this level also played a part in Friday’s bounce.

It’s going to take a close below this trend line to expose downside targets. One of those is 108.50 followed by the 107.40/70 area. Looking higher, I’d expect any retest of 109.50/60 to attract an influx of selling pressure.

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usdjpy 4-hour time frame

Last Wednesday I mentioned how the GBPJPY was likely to encounter selling pressure at 150.70 if tested as new resistance. Sure enough, Monday carved a high of 150.85 before settling at 150.41 at the close.

That was the only up day for the pair last week. The next four sessions went on to produce a loss of more than 300 pips.

It isn’t surprising to see how the pair found support near 147.00 on Friday. This area is represented by ascending channel support that extends from the 2017 low. This was another level I pointed out last weekend.

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.

Those in search of a more substantial development to enter short might need to wait for a daily close (using a New York close chart) below ascending channel support near 147.00.

Be sure to review Friday’s post for more detail and a view of the twelve-month channel that I mentioned above.

gbpjpy ascending channel on the daily chart

I don’t discuss crosses like the GBPAUD often. The choppy and often unpredictable price action makes for a less than ideal environment.

However, every once in a while they do produce an opportunity worth some extra attention.

On Friday, the GBPAUD closed below the 1.80 handle. It’s a level that capped advances in December of last year and again this past February.

There is also a trend line that extends from the September 2017 low that appears to have broken down last week. That makes the 1.80 area a confluence of resistance that may produce a selling opportunity this week.

Key support from here comes in at 1.7620/50. A daily close (New York 5 pm EST) below that would expose the next key support at 1.7360.

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gbpaud trend line support on the daily chart

Leave a Comment:

36 comments
Shahid says

Excellent work on price action, thanks for help..

Reply
    Justin Bennett says

    You’re welcome.

    Reply
      ola says

      nice viewon gj. are u watching usdchf

      Reply
      sanjeev sharma says

      nice & excellent work

      Reply
    Maqbool Ahmed says

    00923037152992

    Reply
Maddy says

Hii Justin…nice analysis. From the past two weeks ucad is ranging between 1.28 and 1.29. can you plz throw some light on this pair?

Reply
    Justin Bennett says

    Perhaps this week, but the USDCAD price action has been ugly lately. There are much better opportunities out there in my opinion.

    Reply
    howard says

    it’s been ranging in a very balanced way between 1.28-1.29 & is yet to show us who is in control….patience

    Reply
Sumantra Kumar halder says

Excellent

Reply
Louis says

splendid once again, Justin .please i need to know more on price actions

Reply
    Justin Bennett says

    Pleased to hear it, Louis. The site is full of free content on price action.

    Have you seen the swing trading PDF below? I just launched it on Friday.

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

    Reply
Ifeanyi Alex Robert says

How do i join your masterclass group sir

Reply
MI Lad Lj says

Good analysis .You are the best justin ❤

Reply
Tjokosela Mahlomola Benedict Benedict Mahlomola Tjokosela says

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

Reply
Adeyanju says

Great Analysis, Many thanks Justin.
Is there any other mode of payment aside PayPal and Card payment, am having difficulties with this channels.

Reply
    Justin Bennett says

    Right now it’s only major credit card.

    Reply
astrobar says

hi justin…thanks for all

Reply
    Justin Bennett says

    My pleasure.

    Reply
Furaha Kaisi says

Your good bro thanks for your time and your effort

Reply
    Justin Bennett says

    Anytime, Furaha.

    Reply
Nwosu Nelson. O says

Very helpful analysis.

Reply
medy says

thanks justin

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Belal hossain Farabi says

Awesome!!

Really

your analysis is so good.
it work perfectly

Love u

thnxx

Reply
    Justin Bennett says

    Pleased to hear it. Thanks for commenting.

    Reply
aman says

Thanks Justin…your article and analysis improve a lot on my trading.. 🙂

Reply
Chris says

I was thinking there is no room for the GA to move further down but your analysis have me thinking otherwise. Thanks again

Reply
Fennie Mudzi says

Quite educative and good analysis

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ERICK EMMANUEL says

What about USDCAD ? I thought it was supposed to break the 1.28000?

Reply
    Justin Bennett says

    Supposed to break a level? Nothing in the market is “supposed” to do anything.

    As I mentioned above, the USDCAD is less than ideal for trading right now in my opinion.

    Reply
bill says

Good job. Thanks a lot

Reply
    Justin Bennett says

    You’re welcome.

    Reply
derrick says

nice update sir

Reply
agiup says

can you comment on EUR/GBP and USDCHF?

Reply
Henry says

Many tks for nice work. Are EURUSD & GBPUSD keeps bearing for next week?

Reply
Henry says

Hi Justin, can you comment for EURJPY? Tks

Reply
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