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Weekly Forex Forecast (November 19 – 23, 2018)

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I’ve gone from being quite bearish EURUSD to relatively bullish, all in the span of a week.

I went into last week short the euro. The bearish rejection at 1.1430 resistance was enough for me to open a small short position.

My target was 1.1130.

However, the aggressive bounce on the 13th signaled there was quite a lot of demand below the 1.1300 handle.

Upon seeing this, I decided to close my short. I still managed to clear just over 150 pips, so I can’t complain too much.

Then on Thursday, I warned readers about being short EURUSD.

The price action below 1.1300 and subsequent close back above it was indicative of euro strength.

By Friday’s close, EURUSD had turned positive for the week with an impressive single session 90-pip rally.

That late-week push confirmed the weekly reversal pattern.

So where to this week?

The critical test for buyers will be 1.1430. The area has served as resistance since October 25th, and I have no reason to suspect sellers won’t try to defend it again this week.

That means you need to be extremely careful about buying EURUSD below 1.1430.

As I mentioned on Friday, a pullback into the 1.1350 area may attract a bid.

However, it’s going to take a daily close above 1.1430 to extend the latest rally efforts. Such a break would expose 1.1530 and perhaps 1.1620.

I remain long from 1.1335. If EURUSD moves that low this week, I’ll exit the position.

As I pointed out on Friday, I don’t want to see the euro give up Friday’s gains. That would indicate weakness and a return to the 1.1300 area.

In my opinion, this is a waiting game unless you’re in at much lower prices.

IMPORTANT: I use New York close charts so that each day closes at 5 pm EST.

EURUSD support and resistance levels

Last week’s volatility wreaked havoc on the technical landscape for GBPUSD.

As such, I’ve removed a couple of the levels from last Sunday’s commentary. They may still trigger moves, but they aren’t worth watching in my opinion.

The two key areas for GBPUSD are 1.2700 support and 1.3260 resistance.

The 1.2930 area could continue to play a role, but the 560-pip range is the one on everyone’s radar.

As long as the pair remains above 1.2700 and below 1.3260, the market is range bound.

That may sound appealing. After all, who wouldn’t want to trade a 560-pip range?

But I have to caution readers here.

The continuous flow of Brexit rhetoric has really disrupted things. In fact, it’s made GBPUSD downright dangerous to trade.

I think it’s also important to weigh GBPUSD against other opportunities this week.

For example, AUDUSD and even NZDUSD may be better choices if you’re after USD exposure. See below.

So while a bullish signal from 1.2700 or a bearish one from 1.3260 may present an opportunity, I think there are better, less volatile options.

GBPUSD support and resistance levels

Perhaps the best opportunity this week comes from AUDUSD.

A glance at the daily time frame shows what could be an inverse head and shoulders pattern.

The structure began forming with the late August selloff. Buyers then carved the head of the formation throughout October.

Last but certainly not least, Friday’s close appears to have cleared the neckline.

As long as buyers can hold prices above 0.7300 on a daily closing basis, AUDUSD has considerable bullish potential.

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The first key resistance comes in at 0.7460. It’s the location of several daily lows and highs between May and July.

How about the measured objective?

Given the 280 pip height of the reversal pattern, the measured objective comes in somewhere near 0.7580.

It’s important to keep in mind that there are never any guarantees. An objective like the one I just mentioned only serves as a rough guide.

But before we can think about 0.7460 or 0.7580, AUDUSD needs to hold the line at 0.7300 this week.

If the pair falls below it on a daily closing basis, all bets are off for a 280 pip reversal.

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AUDUSD head and shoulders pattern

The NZDUSD downtrend that had persisted since April came to an abrupt end on November 1st. That’s when bulls cleared channel resistance near 0.6570.

Since that time, the pair has caught a bid just above 0.6610 and again last week at 0.6700.

I mentioned the potential for a reversal on October 16th. A descending channel following an aggressive downtrend acts similar to a falling wedge pattern.

With that in mind, we began watching for buying opportunities on November 1st. Since then, NZDUSD has managed to claw back 300 pips.

Last Friday I alerted readers to the possibility of a daily close above 0.6850. You can see how this area has served as a key pivot since mid-May.

When I published that commentary, NZDUSD was trading at 0.6840.

Within a few short hours, buyers secured a daily and weekly close at 0.6876. That puts the kiwi well above our 0.6850 level.

So what’s the plan for this week?

Simple. Watch for a buying opportunity on a retest of 0.6850 as new support.

Now, there is one drawback. The 10 and 20 daily EMAs are trailing Friday’s close by more than 100 pips.

That alone suggests we should see a retest of 0.6850 before the next push higher.

The big question is, how much pressure will sellers put on the new support level?

Will we see an intraday dip below it or will buyers soak up everything at 0.6850 and above?

We’ll have to wait and see.

What I do know is that the rally is alive and well. And as long as 0.6850 holds as support on a daily closing basis, 0.6960 remains exposed.

NZDUSD descending channel breakout

Gold bounced from 1200 support last week. It’s an area I’ve pointed out a couple of times in recent weeks.

The area is part of an ascending channel that could be a bear flag pattern.

However, we don’t have enough information to conclude that this is a bearish continuation pattern.

Until sellers can clear channel support on a daily closing basis, this market is in a short-term uptrend.

You may also recall the 1215 level from Wednesday’s post. It was resistance at the time, but I wasn’t ignoring the possibility of a close back above it.

Here’s what I wrote last Wednesday:

A daily close below channel support near 1200 would expose the October lows at 1180 followed by the year-to-date low at 1160.

Alternatively, a close back above 1215 would signal that buyers aren’t finished carving this channel. It would also open the door to resistance at 1235.

As you can see, the pair never did close below 1200. Instead, buyers extended the late week rally above 1215.

That means any retest of the 1215 area this week should attract a bid. Whether it triggers another push higher is yet to be seen.

But as long as gold remains above 1215, traders would be wise to suspect a move to the next key resistance at 1235.

Bear in mind that this is a consolidating market. As such, I wouldn’t expect a lasting move higher or lower as long as this ascending channel is intact.

Keeping expectations limited and trading the smaller ranges seems to be the way to go for now.

IMPORTANT: I use New York close charts so that each day closes at 5 pm EST.

Gold bear flag

Leave a Comment:

60 comments
Lin Oo says

Thanks, Justin.

Reply
    Justin Bennett says

    My pleasure, Lin.

    Reply
      Imran Khan says

      Hi, Justin i always read your analysis and trade according to it, thanks to you. I would like to join your community group please guide me how to join it?

      Reply
danish mehmood says

very good and price action signals

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    Justin Bennett says

    Cheers. Have a great week!

    Reply
      Peace says

      Your Analysis of GBPNZD was spot on and made some good profits solely based on your sage advice. Thanks a lot. Now I can’t wait for this week

      Reply
        Justin Bennett says

        It was a fast mover for sure. You’re welcome.

        Reply
Johns Paly says

Your Analysis of GBPNZD was spot on and made some good profits solely based on your sage advice. Thanks a lot. On Friday close the price has formed a nice bearish pinbar (or a falsebreak…) what do you think will happen?

Reply
    Justin Bennett says

    You’re welcome. Nothing has changed since last week’s GBPNZD post.

    Reply
Mosa says

Thanks. Insightful

Reply
    Justin Bennett says

    You’re welcome. Glad to hear it.

    Reply
Stephen says

Nice one

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Salvatore says

Analysis on point
Gbpusd very tempting this week

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Vettis says

Thank you for the deligence you show us. I’m delighted to be your mentee👌👌👌💜💜💜

Reply
    Justin Bennett says

    You’re welcome, Vettis. Enjoy your week!

    Reply
Volca says

Thank you Justine iam really getting better everyday from your guide.

Reply
    Justin Bennett says

    That’s awesome to hear. You’re very welcome.

    Reply
Nkosekhaya Zatu says

AUDUSD will be my pair , great profit made last week on your EURUSD analysis. Thank You Coach 🙏🏽

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    Justin Bennett says

    You’re welcome. AUDUSD requires patience.

    Reply
Uzoma Nnamdi says

Thanks Sir Justin, your analysis and blog posts have really helped me a lot. God bless you with more knowledge.

Reply
    Justin Bennett says

    My pleasure. Always happy to help.

    Reply
Osahon says

Big thanks to you Coach Justin. You have really taught me technicalities about trading.
Thanks .

Reply
    Justin Bennett says

    Anytime, my friend. Keep it simple. 🙂

    Reply
Gabriel Odok says

Thanks for making gold commentary a permanent remark. U truly listen!

Reply
    Justin Bennett says

    You’re welcome. It isn’t permanent, but I do try to listen. 🙂

    Reply
Tanaka says

Hi Justin. I like dailypriceaction.com. I was just wondering why you never write about crude oil.

Reply
    Justin Bennett says

    Glad you like it. I do write about it. Oil needs time to digest recent losses after reaching our target at 66.00 from my call at 74.00. It also reached our second target at 58.00. You can view all of it in recent posts.

    Reply
roberto says

Grazie per le analisi molto chiare

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Peter Pel says

Your analysis have really been helpful. Thanks a lot, Justin

Reply
    Justin Bennett says

    Hi Peter, glad to hear that. It’s my pleasure.

    Reply
Moffat ivinza says

What about GBPJPY?

Reply
    Justin Bennett says

    What about it? 🙂

    Reply
Yusuf Ahmad says

Good job. Always enjoy your analysis.
Thanks

Reply
    Justin Bennett says

    Thanks, Yusuf. Let me know if you have questions.

    Reply
Samuel says

Thank you so much for this week analysis.May the Almighty God bless you.

Reply
    Justin Bennett says

    You’re very welcome.

    Reply
Ballack says

Thanks Justin. This article looks promising. Price Action is the best.

Reply
    Justin Bennett says

    Anytime! I agree 100% that price action is indeed the best.

    Reply
POLA P says

always keeping it SIMPLE…thanks!!!

Reply
    Justin Bennett says

    You got it! You’re welcome.

    Reply
suresh mathur says

thanks for your analysis and gaining lots of insight on PAT.
Where do i find the analysis for other pairs.

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Lucy says

Thank you Justin , I am glad I never hesitated joining you in this community 🙂

Reply
    Justin Bennett says

    You’re welcome, Lucy. Pleased to hear that, and great to have you. 🙂

    Reply
fawaz bamakrait says

thanks Justin.
i am learning a lot from you .

Reply
    Justin Bennett says

    My pleasure. Thanks for sharing.

    Reply
Đổ Đăng Khoa says

thanks, Justin

Reply
    Justin Bennett says

    You’re welcome.

    Reply
mandla matafeni says

fantastic analysis.

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    Justin Bennett says

    Cheers, Mandla. Have a great week!

    Reply
Anesu says

Thanks Justin. As always.

Reply
    Justin Bennett says

    You’re very welcome.

    Reply
Jacob Amfo-Okyere says

Hi Justin. I am a new trader. Today’s my first time of reading your analysis, abd l am grateful for the insight and trust it would be helpful to me in my trading. I would, however, like to join your community group please guide me how to join it?

Reply
Nhlanhla says

Thank you very much for such valuable information.

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Leo says

Am new here guyz

Reply
    Justin Bennett says

    Welcome! Thanks for stopping by and commenting.

    Reply
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