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Weekly Forex Forecast (November 21 – 25, 2016)

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Following the EURUSD‘s sizable 445 pip slide following the November 9th U.S. elections, the pair tacked on another 270 pips of losses last week.

That amounts to ten consecutive down sessions, a feat that didn’t even occur during the 3,500 pip landslide that began in May of 2014.

However, the pair did come into a bit of support during Friday’s session. The channel that extends from the 2016 high at 1.1615 has a floor near the 1.0570 handle. We’ll find out soon enough if this area has what it takes to break the ten-day losing streak.

It might go without saying, but given the extreme bearish momentum of late, I’m only interested in selling opportunities going forward. One such area that could trigger a setup is the January low at 1.0710.

Below channel support we have the December 2015 low at 1.0515 followed by the 2015 low at 1.0460.

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eurusd-descending-channel

GBPUSD ended Friday’s session above the 1.2326 handle. This is an area that capped two advances in October and could limit losses so long as the pair trades above it on a 4-hour closing basis.

All of this comes after the November 15th sell signal via the bearish pin bar you see below. This break of support was one of two potential opportunities that I mentioned last Monday.

I see no reason to change the bearish outlook for the pound against the US dollar. And unless the tail of this 4-hour bearish pin bar at 1.2513 gets taken out, a move lower from current levels is the likely path forward.

A close below 1.2326 would expose the October lows at 1.2090. Below that we have the flash crash low near 1.2000.

gbpusd-key-break

USDJPY is another one I mentioned on Friday. The rally that began in the wake of the U.S. elections catapulted the pair above channel resistance that extends from the June 24th high.

Although the pair is quickly approaching resistance near 111.40, I’m only interested in buying opportunities given the bullish momentum of late. At the same time, the overstretched price action makes it unfavorable to enter long at current levels.

As such, it may be prudent to wait for a pullback to support near the 109.00 handle. If one doesn’t materialize, traders can watch for opportunities to get long on a daily close above the 111.40/80 area.

Above the April and May highs, there isn’t much in the way of resistance until the February and March highs at 114.55.

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

usdjpy-breakout

From a technical standpoint, the AUDUSD has seen it all. Over the past few weeks, we’ve had engulfing candles, pin bars, false breaks and a wedge pattern that spans all of 2016.

Throughout this melting pot of formations, I’ve kept a bearish bias due to the multi-year downtrend that commenced in 2011.

On November 11th those with a bearish bias were vindicated when the pair closed the session below wedge support that extends from the current 2016 low.

From here, traders can watch for selling opportunities on a rotation back to the 0.7440 handle. Key support for the week ahead comes in at 0.7330, which is also the 50% retracement of the entire 2016 rally.

audusd-false-breaks

After breaking below the ten-month ascending channel, the NZDUSD confirmed the six-month head and shoulders reversal last Thursday. The combination of these two breaks signals the likelihood of more losses for the New Zealand dollar.

While I continue to favor the downside, the pair is quickly approaching key support at 0.6966. This area attracted buyers on several occasions between mid-June and late July.

However, the measured objective of this 480 pip head and shoulders pattern doesn’t come in until 0.6585. Right now I see no reason to doubt its validity or the idea that the pair could reach this area over the coming weeks.

Taking that notion one step further, my long-term outlook for the NZDUSD hasn’t changed. An eventual move to the sixteen-year channel support near 0.5930 is still a very real possibility.

I remain short from 0.7331 and also added to the position last week following the close below neckline support.

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

nzdusd-head-and-shoulders

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