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Weekly Forex Forecast (November 28 – December 2, 2016)

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The EURUSD is flirting with a major support level that extends from the 2015 low at 1.0460. This comes after a record ten-day losing streak that cost the pair more than 700 pips.

The weekly chart below shows the support level in question.

eurusd-weekly

While this trend line may vary by broker due to the volatility on December 3, 2015, last Wednesday’s session does appear to have broken it.

With that said, the nearly 400 pips between current prices and the weekly mean (10 and 20 EMAs above) leaves me skeptical. As always, the next 24 to 48 hours of price action should help to clear things up.

As tempting as it may be to go short at current levels, keep in mind that the December 2015 (ECB) low comes in at 1.0515. Even below that, we have the multi-year low at 1.0460.

For these reasons, I’ll wait for a definitive break of support near 1.0460 before considering an entry. My long-term outlook for the EURUSD hasn’t changed.

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

eurusd-key-break

GBPUSD has been relatively indecisive lately. While the pound has been one of the more resilient currencies against the US dollar, the pair certainly didn’t produce anything worthwhile last week.

In fact, it’s been range-bound since closing above the 1.2326 handle on November 3rd.

Given the long-standing downtrend, I’m only interested in selling opportunities. This has been the case for more than two years now.

The way I see it there are two options for the upcoming week and beyond. The first would be a retest of the post-Brexit low at 1.2790 which could generate a favorable opportunity to go short.

The second option would be a daily close back below 1.2326. Such a close would re-expose the October lows near 1.2090 followed by 1.2000.

gbpusd-support-and-resistance

The AUDUSD caught a bid last week at 0.7330 but ultimately failed to breach the 0.7440 handle on a daily closing basis. We’ve been talking about these two levels for several months now, and so far the pair is staying true to form.

It may be tempting to go short based on Friday’s bearish rejection of 0.7440. And while such a trade may play out in your favor, I’m hesitant to say that buyers have exhausted their resources.

While I’m still bearish here, the massive 450 pip slide in just eight sessions leaves the pair a bit overstretched. Last week’s bounce helped to reset things, but I’m not confident it was enough.

But like everything we do, the price action will tell the story. A sell signal from the 0.7440 area could make for a compelling opportunity to go short while a close below 0.7330 would expose the May lows near 0.7150.

I’ll also be keeping a close eye on the intraday charts for any hints of exhaustion.

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

audusd-key-levels

After dropping 400 pips in eight straight losing sessions, the NZDUSD found a bid on November 21st. The bounce wasn’t a surprise for those who studied this lesson on equidistant channels.

In addition to the 0.6984 channel support, there is a key horizontal level at 0.6966. The area attracted buyers on two separate occasions in June and once again in July.

From here the pair finds itself in a tight 100 pip range. The upper boundary is represented by former neckline support while the intersection at 0.6966 is just as prominent.

However, given the November 15th break of ten-month support and confirmed head and shoulders just two days later, my bearish bias is still intact.

There are two ways to approach the NZDUSD in the week ahead. Either watch for selling opportunities from resistance near 0.7080 or wait for a daily close below the 0.6966 area. The former will yield a better risk to reward ratio while the latter is the more conservative approach.

nzdusd-head-and-shoulders

Last but not least is EURGBP. I mentioned the currency cross last week after sellers managed a daily close below channel support.

However, the horizontal level at 0.8488 kept us on the sidelines. Just two days later the pair closed below 0.8488, exposing a level that’s nearly 150 pips away at 0.8340.

Sellers were put to the test on Friday as the Euro gained traction via a weaker US dollar. But despite some intraday strength, the pair closed the week back below the 0.8488 handle.

From here traders can watch for selling opportunities while the EURGBP trades below 0.8488 on a daily closing basis. Key support comes in near the September low at 0.8340.

With that said, there is a more aggressive target at 0.8120. The confluence of support is the intersection of the April high and the trend line that extends from the November 2015 low.

A move to this area would also close the gap that’s been left open since the June 24th Brexit.

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

eurgbp-bearish-rejection

Leave a Comment:

4 comments
Ransfor says

Reading your articles has really helped me as a beginner in trading
regards

Reply
    Justin Bennett says

    Pleased to hear that. Feel free to reach out with any questions.

    Reply
ravi shankar says

Dear Sir,
Everything appears in order except the chart”s handle digits.I feel that they must appear larger in size so that one can easily grasp them rather than be in doubt.
Kindest Regards,
Ravi

Reply
    Justin Bennett says

    Ravi, thanks for the suggestion but that isn’t possible. It’s why I mention the levels in the commentary.

    With that said, the charts in the member’s area do expand to full size.

    Reply
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