Weekly Forex Forecast (September 10 – 14, 2018)

by Justin Bennett  · 

September 9, 2018

by Justin Bennett  · 

September 9, 2018

by Justin Bennett  · 

September 9, 2018

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 charts I use.

On Friday, I explained how the EURUSD has been indecisive but technically sound. In other words, there’s no clear directional bias, but the pair is respecting support and resistance areas.

In last Sunday’s forecast, I pointed out support at 1.1530. I also highlighted the 1.1640/50 resistance area. You can see from the chart below how the Euro respected both areas last week.

Friday’s session brought the single currency back to 1.1550, just 20 pips above 1.1530 support. As such, I wouldn’t be surprised to see an early retest of 1.1530 this week.

But just as I mentioned on Friday, it’s going to take a daily close below 1.1530 to expose downside targets including 1.1300. Until that happens, the EURUSD will remain range-bound between 1.1530 and 1.1630.

Keep in mind that I use New York close charts so that each 24-hour session closes at 5 pm EST. Click here to get access to the same charts I use on this website.

I remain short from the August 31st session at 1.1642. I will be interested in adding to the position following a daily close below 1.1530.

Want to Learn Step-By-Step How I Swing Trade the Forex Market?

Click Here to Register for the Free Webinar!

EURUSD support and resistance

Friday’s bearish pin bar suggests the GBPUSD could come under further selling pressure this week. The descending channel that has been in place for several months is what attracted sellers before the weekend.

In addition to channel resistance, the pound also retested the recent highs at 1.3040. I mentioned this level in last Sunday’s forecast.

We may see the pair gain some ground early this week, but I’d suspect sellers to be camped out between 1.2960 and 1.2980. That could present a favorable selling opportunity for a move back to key support at 1.2800.

A daily close (New York 5 pm EST) below 1.2800 would expose the year to date low at 1.2660. Alternatively, a daily close above descending channel resistance near 1.2980 would negate the bearish bias and expose 1.3040.

I will remain bearish the GBPUSD so long as this channel remains intact on a daily closing basis.

GBPUSD daily time frame

Last week was more of the same from the USDJPY. As soon as buyers gain a foothold and push prices higher, they’re forced to retreat.

This back and forth price action has plagued the risk-sensitive pair for the majority of 2018. It’s the reason I haven’t traded it for quite some time.

But I also know it’s a popular choice for many traders, so I’ll do my best to interpret what’s happening here. However, I still think you’d be better off going with any of the other currency pairs in today’s post.

I mentioned what appeared to be a falling wedge on August 23rd. Not long after that post, buyers closed the pair well above resistance.

Since that time though, USDJPY bulls have struggled to gain any meaningful ground. It seems the 111.70 area is attracting quite a lot of selling pressure.

On the other end, buyers continue to come to the rescue as soon as prices dip near former wedge resistance. We saw it happen on August 31st and again on Friday.

There is also a trend line support that extends from the year to date low that appears to have come into play just before the weekend. Note how the pair caught a bid from this level on Friday.

Now to play devil’s advocate for a moment. The USDJPY has been terrible at respecting trend lines for most of the year. If you’ve been trying to trade the pair based on trend line breaks in 2018, you know what I mean.

So take any break of the trend line below with a grain of salt. In fact, take extra care when pursuing any breakout here. The pair remains incredibly indecisive and difficult to interpret when compared to some of the other more favorable currency pairs.

USDJPY trend line

Last week the USDCAD completed what appears to be a bull flag pattern. I discussed it last Sunday and again on Tuesday.

So far, the pair is holding above former channel resistance which should now serve as support. That level comes in near 1.3050.

However, Thursday’s bearish engulfing range indicates that we could see further weakness before the next leg up. There are no guarantees, but a recent bout of Canadian dollar strength could put pressure on USDCAD bulls this week.

The best course of action, in my opinion, is to stay patient. The pair is still hovering well above the 10 and 20 daily EMAs suggesting that prices remain stretched following last Tuesday’s rally.

As long as the USDCAD trades above former channel resistance (new support), the potential for further gains seems likely. Key resistance comes in at 1.3385 with a minor area near 1.3270.

Alternatively, a daily close back inside the descending channel would negate the bullish idea.

USDCAD bull flag pattern

The AUDUSD spent most of last week consolidating above the confluence of support at 0.7160. I wrote about this area on Thursday and explained why it’s so important.

However, sellers decided to change things up on Friday, closing the pair nearly 60 pips below the key support level.

Here’s where things get tricky though. I’ve mentioned in the past how a downside break of a descending pattern is not ideal. Think of what happened to the GBPUSD in August.

That said, there is a chance that the AUDUSD price action since May has formed a descending channel rather than a wedge. See the chart below.

If that’s the case, the 0.7140/60 area could serve as resistance moving forward. It would also expose the 0.7000 handle and perhaps even the 0.6840 region I mentioned previously; it all depends on how quickly the latest breakdown unfolds.

Given that Friday closed well over 100 pips from the 10 and 20 daily EMAs, a retracement this week seems likely, and bearish price action from 0.7140/60 could present a selling opportunity.

Just know that Friday’s breakdown could be a bear trap, so reducing your position size may not be a bad idea. And if the AUDUSD closes the day (using a New York close chart) back above 0.7160, it would negate the bearish outlook for the time being.

Want to Learn Step-By-Step How I Swing Trade the Forex Market?

Click Here to Register for the Free Webinar!

AUDUSD breakdown on daily time frame

Continue Learning


Leave a Reply

Your email address will not be published. Required fields are marked *

  1. Hi Justin, thanks for ur utmost sincere analysis, on GBP/USD, I entered a sell order months ago at 1.2660, when I thought it was bound to continue on a bearish trend, since then it has gone back to 1.3040 resistance levels, costing me $300 in an open order(no stop loss or take profit set). I question now is should accept it as a loss, and close order or leave because it has raked in some $1 plus swap difference. Is the pair ever going to test 1.25 levels?

    1. Edward, hello! I’d suggest you do what you think to be right to you depending on your risk appetite. Anything can happen, you might hold a little bit longer and the market might go in your favor, or otherwise too.. So the decision is really up to you.

    2. Anything can happen like she said. It might break channel resistance once more and then make a daily close in the channel. Personally, I think it will end up selling towards channel support before the long move up.

    3. Edward there is still much more potential for further downward movement due to BREXIT…On a short term basis i.e this week it should reach the 1.2850 handle or less….Thereafter if the 1.28 handle is breached the next support level is at 1.2660….so take it week by week for now…

      To your advantage, the DXY (dollar strength index) in fact also has a huge potential to reach the 99 handle in the near future as from wave harmonics. But the market is always right and you cannot force it to suit your trades

      However no one is going to condition you on how to really trade as the final judgement with your money should always be yours. However trading without a stoploss, does not put a trader’s mind at a better position or at rest as it makes the trade a lot riskier than not….Ideally always set your stop loss to 0.5 – 1 % of your entire equity. If you lose the trade reopen it and if you utilize the correct risk to reward ratio you are always a winner on the long run.

    4. Same thing happened to me but later open another position with a low lot in case it might later go in my favour. And later close both with more of loss that gain

    5. The market does what it wants when it wants. Nobody knows when or if a move will happen, so it’s best to plan for every outcome. If you don’t have one, why not get out now and save yourself the added stress and potentially more lost funds?

  2. Thanks mentor, i have been trading for one year without success even fell sick because of stress, just 6months ago i bought your Ultimate Forex Swing Trading Course. I digested it with every bit of my blood. Just last week i bought my first car from money i made in trading. I never thought this was possible i almost gave up trading after wiping my 5th account trying to trade 30mins and 15mins time frame. I don’t know if you are a Christian, but i believe God used you to answer my prayer. Thank you, justin.

    1. That’s awesome Peter. Great to hear.

      Now start reinvesting those profits and increase your position size as your account grows. That’s where the magic happens.

  3. Hi Justin master my question is your analysis pairs are USD based. once negative side move USD. you analysis chart are may be wrong….

    1. I discuss crosses during the week too. As for your concern about USD pairs, I analyze a chart on its own merits. If the market negates an idea, so be it. We move on to the next one. 🙂

  4. Always on the money Justin, your analysis are easy to follow yet powerful in theory, I always read up on your weekly forecast. It is only once that a currency went a different way & that was EURCAD H & S pattern that failed, who knew keep it up you’re doing a fantastic job.

    1. Cheers. EURCAD didn’t quite work out, but several other members and I caught the selloff at the end of June, so no complaints here.

  5. i kept blessing the day i found your site, following you has change my approach to trading.
    thks, happy trading to all followers of this great blog this week

    1. What was my prediction?… It was a Friday signal which tend to be unreliable. I’ve also been discussing how the descending channel is inherently bullish for weeks.

  6. Hi regarding GBPUSD a daily close above descending channel resistance near 1.2980 has occured & 1.3040 has also been exposed is it a good time to sell?

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}