Daily Price Action
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Weekly Forex Forecast (May 11 – 15, 2015)

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Last week EURUSD looked poised to take out the 1.1260 key resistance level on the back of its aggressive rally from the 2015 lows. However the pair struggled to maintain higher ground after testing the level as new support during Friday’s session.

Market Movers

  • Monday: Eurogroup Meetings (EUR) @ all day
  • Wednesday: German Prelim GDP (EUR) @ 2am EST, Core Retail Sales + Retail Sales (USD) @ 8:30am EST
  • Thursday: PPI + Unemployment Claims (USD) @ 8:30am EST
  • Friday: Prelim UoM Consumer Sentiment (USD) @ 10am EST

The technical outlook for the Euro is much clearer than that of the fundamental outlook, which remains elusive to say the least. With the pair once again below 1.1260 we can watch for bullish price action on a retest of the 1.1035 level.

This area can be seen acting as strong resistance on several occasions between March and April. Bullish price action from this area could present a favorable buying opportunity.

Keep in mind that with the continued likelihood for increased volatility for the Euro, the daily time frame is the preferred approach to trading any price action setups.

Summary: Watch for bullish price action on the daily time frame on a retest of 1.1035 as new support. Key resistance comes in at 1.1260 and 1.1530.

EURUSD key levels to watch on the daily time frame

Market Movers

  • Monday: Official Bank Rate (GBP) @ 7am EST, MPC Rate Statement (GBP) @ tentative
  • Tuesday: Manufacturing Production (GBP) @ 4:30am EST
  • Wednesday: Average Earnings Index + Claimant Count Change (GBP) @ 4:30am EST, BOE Gov Carney Speaks + BOE Inflation Report (GBP) @ 5:30am EST, Core Retail Sales + Retail Sales (USD) @ 8:30am EST
  • Thursday: PPI and Unemployment Claims (USD) @ 8:30am EST
  • Friday: UoM Consumer Sentiment (USD) @ 10am EST

Contrary to the Euro, GBPUSD finished the week strong with the help of the UK elections. The outcome of the event triggered quite the rally over the last 24 hours of the trading week.

With a gain of 190 pips during Friday’s session the pair looks ready to tackle the next resistance level at 1.5550. The 1.5350 level comes in as support should the bears decide to test bullish conviction early in the week.

Of a broader significance is the fact that the pair was able to maintain bullish momentum last week after breaking trend line resistance on April 24th. Higher prices are likely as long as GBPUSD can remain above the last swing low at 1.5080.

Summary: Watch for bullish price action on a retest of 1.5350 as new support. Key resistance comes in at 1.5550. A break and close above 1.5550 would expose the next key resistance level at 1.5825.

GBPUSD support level on the daily time frame

USDCAD looks to have the most potential in terms of a clean technical pattern going into the new week. I actually mentioned this pattern on Thursday of last week noting the bullish pin bar that had formed the day before.

Between late January and mid April the pair found itself ranging between 1.2380 and 1.2800 before breaking to the downside on April 15th. Despite the break of support, USDCAD remains well supported above 1.2000.

Market Movers

  • Wednesday: Core Retail Sales + Retail Sales (USD) @ 8:30am EST
  • Thursday: PPI + Unemployment Claims (USD) @ 8:30am EST
  • Friday: Manufacturing Sales (CAD) 8:30am EST, Prelim UoM Consumer Sentiment (USD) @ 10am EST

This horizontal level intersects with trend line support from September of 2014, giving buyers a nice confluent area to trade from. The bullish pin bar on Wednesday gave us further confirmation that buyers like the odds of a push higher from current levels.

There is also a minor double bottom that formed between the April low of 1.1940 and the low of Wednesday’s pin bar. The pattern is best viewed on the 4 hour time frame.

From here we can look to buy Wednesday’s pin bar in anticipation of a move back to recent lows at 1.2380. This level also represents the 50% retrace from the March high to the April low.

Summary: Opportunity to buy Wednesday’s bullish pin bar. Key resistance comes in at 1.2380 and 1.2800 with a minor resistance level at 1.2200. A move below 1.1940 would invalidate the setup.

USDCAD bullish pin bar at confluent support area

Market Movers

  • Monday: Eurogroup Meetings (EUR) @ all day
  • Wednesday: German Prelim GDP (EUR) @ 2am EST
  • Friday: Manufacturing Sales (CAD) 8:30am EST

Another CAD pair I’m keeping an eye on is EURCAD. The last time I mentioned this pair it was consolidating below the 1.3388 key level and getting ready for a potentially explosive move.

The pair didn’t disappoint as it rallied almost 500 pips shortly after that commentary. However selling pressure proved too strong at 1.3755, forcing the pair to finish the week lower.

From here we can watch for a rotation back to 1.3388 as new support. This level is now the 50% retrace from the April low to the May high. Any bullish price action from here could present a favorable buying opportunity.

Summary: Watch for bullish price action on a retest of 1.3388 as new support. Key resistance comes in at 1.3755 and 1.4078. A daily close above 1.3755 is all that’s needed to expose 1.4078.

EURCAD key levels in focus on the daily time frame

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