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Weekly Forex Forecast (April 13 – 17, 2015)

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GBPAUD suffered its largest one-week loss last week since the beginning of the year. The decline commenced as the pair found selling pressure at trend line resistance from February 12th. In fact this level has now acted as resistance on four separate occasions since its inception.

But the bears aren’t home free just yet. In fact they are far from it. GBPAUD is going to face a major test in the week ahead as the pair approaches wedge support at 1.90.

GBPAUD daily chart:

GBPAUD daily Forex chart showing a wedge pattern

The support level that makes up half of the wedge pattern dates back to November of last year and has since acted as support on three separate occasions. So in terms of a valid pattern, this one has everything we need in order to trade it as a breakout.

In the week ahead we can watch for one of two things to happen:

  1. Bullish price action on the 4 hour or daily time frame on a retest of wedge support
  2. A close below wedge support on the 4 hour or daily time frame

If we get bullish price action in the form of a pin bar at the 1.90 area we can begin looking for a 50% entry to go long.

Alternatively, a close below wedge support would have us looking for bearish price action on a retest of the level as new resistance.

Summary: In the event we get bullish price action followed by a move higher, we can look to wedge resistance as a possible target. On the other hand a move below wedge support would have us looking to the March low at 1.8830 followed by the 2015 low of 1.8375.

GBPAUD 4 hour Forex chart wedge patternGBPUSD analysis

GBPUSD key level for the week ahead

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