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While last week’s price action was a bit sporadic, it did present us with some high-potential setups to watch for the coming week. We’re going to start off today’s weekly Forex forecast with GBPAUD, a pair I mentioned last Monday as one to watch.
We didn’t get anything on the daily time frame last week, however the pair has presented us with an opportunity on the weekly chart. This setup formed on the back of Friday’s surprise rally as the pair managed to hold on to the 2014 high at 1.9170
GBPAUD weekly chart:
Not only did the pair hold the 1.9170 horizontal level on a weekly basis, it also held above channel support. This ascending channel has been in place since September of 2014 and looks to once again play a supporting role for a move higher.
Whenever we get something of interest on such a high time frame, it’s generally a good idea to drop to a lower time frame to search for a more precise entry. In this case we’re looking at the 4 hour chart to identify key levels that could come into play over the next week.
The first thing you should note is that the pair ended the week at resistance at 1.9178. This leaves us waiting for a pullback to support for a more favorable entry, as we normally do when a pin bar of this size forms. That area of support appears to be between 1.9050 and 1.9075.
A very clear horizontal level at 1.9460 should play a major role as key resistance moving forward. However be sure not to rule out the 1.9290 resistance area, which could also attract sellers on a move higher.
Summary: Watch for a retest of the area between 1.9050 and 1.9075 as new support. Alternatively, wait for a 4 hour close above 1.9178 before considering a long entry. Key resistance comes in at 1.9290 and 1.9460.
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