Daily Price Action
Shares

Weekly Forex Forecast (September 26 – 30, 2016)

Shares

EURUSD continues to bounce around without much follow through one way or the other. Although sellers managed to push prices substantially lower from the September 22nd session high, the bulls managed to close the day above the 1.1200 horizontal level.

However, it does appear that the pair failed to close above former trend line support that extends from the July low at 1.0950. But it’s just too close to call at the moment, at least with a high degree of conviction.

As a trader, it’s important to know when to admit that you don’t know, because if it isn’t obvious, it probably isn’t worth the risk. The EURUSD seems to fit that description at the moment, which is more than enough to keep me on the sidelines for now.

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

eurusd-key-levels

Despite early gains, GBPUSD finished the week lower after falling back inside the wedge pattern that began developing at the beginning of July. I mentioned this false break in the last weekly forecast, noting that we could see further weakness from the pound as a result.

From here our attention turns to wedge support that extends from the July 6th low at 1.2790. A close below this level would expose the post-Brexit low followed by the 1.2500 handle while a move higher would re-target wedge resistance.

However, like the EURUSD above, the pound is likely to be constrained as long as it remains within the current three-month range. For this reason, I’m not interested in trading the GBPUSD just yet.

gbpusd-false-break

AUDUSD remains one of my favorite pairs to trade given the long-term support and resistance levels that have created a 250 pip range. However, keep in mind that this range will continue to narrow given the terminal nature of the two patterns involved.

The short setup from September 8th played out nicely with the pair falling 200 pips before finding support at 0.7440. Last week’s rally was impressive, but buyers ultimately failed to breach the confluence of resistance at 0.7650 on a daily closing basis.

Visit the link above to see the three-year pattern that continues to be a factor for the Australian dollar.

All in all, my bias remains weighted to the downside as long as the pair trades below three-year channel resistance that extends from April of 2013. Immediate support comes in at 0.7565.

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

audusd-wedge-pattern

AUDJPY continues to trade below the trend line that extends from the July 6th low on a daily closing basis. I mentioned this possible setup ahead of last week’s BoJ decision, and while sellers have struggled to assert themselves in a lasting manner, they have managed to cap every advance since the September 14th close below support.

For now, the pair seems content to trade between previous trend line support and the 76.00 handle. However, keep in mind that the yen cross is still plagued by a two-year downtrend that began in late 2014.

Given the long-term downtrend and recent price action, my bearish bias stands. Only a daily close back above the eleven-week trend line would negate this bias and turn our attention higher.

audjpy-trend-line

NZDJPY is another pair that has played out beautifully since showing weakness at five-month resistance. I mentioned the possible setup here on September 9th when the NZD cross was trading 230 pips higher than it is at the time of this writing.

Last week marked yet another significant break for the pair, closing below the 73.43 handle. This level previously acted as support in May and June before flipping to resistance in mid-August. It’s also last week’s post-BoJ low.

Given Friday’s persuasive close below the 73.43 level, it’s likely that we’ll see offers develop in this area if tested in the week ahead. Key support comes in at the August double bottom at 72.20.

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

nzdjpy-new-resistance

Leave a Comment:

1 comment
piet says

eish u the guro if u dont know how wil i know regards piet

Reply
Add Your Reply