Weekly Forex Forecast (January 16 – 20, 2023)

Today’s weekly Forex forecast focuses on the EURUSD, GBPUSD, USDJPY, USDCAD, and S&P 500 (SPX500).

We have some incredible technicals shaping up for next week, including July 2021 support for USDCAD and an all-time high trend line for the S&P 500.

Watch the video and scroll down to view the charts to prepare for next week.

EURUSD Forecast

EURUSD broke out last week, finally closing above the 1.0700 range highs.

The euro also cleared 1.0780 on Thursday and found support there Friday. So that’s going to be a pivotal level to watch next week.

The pair looks relatively bullish as long as the EURUSD is above 1.0780 on a daily closing basis.

However, as explained in today’s video above, the weekly time frame introduces a significant hurdle for bulls at 1.0870 next week.

That’s the weekly trend line from December 2016. So it’ll take a daily close above that to open up higher levels, including potentially 1.1120.

Given the above, waiting for a close above 1.0870 or below the 1.0780 horizontal level before acting isn’t a bad idea.

GBPUSD Forecast

GBPUSD has been a mixed market recently.

On the one hand, the short-term uptrend since September is intact, so longs seem appropriate.

And on the other, GBPUSD has traded sideways for weeks, making it a difficult pair to trade.

With that in mind, I’m keeping an eye on two critical levels this week.

The first is the ascending trend line from the September 26th close. That level comes in around 1.2030 this week.

The second level I’m watching is 1.2300 resistance.

GBPUSD failed to hold above this level in mid-December, making it a bearish fakeout.

So any retest of 1.2300 is bearish until bulls can secure a daily close above it.

USDJPY Forecast

In last week’s USDJPY article, I mentioned how a close below 130.60 would open up 126.70.

Thursday confirmed the break, and Friday nearly tested 126.70 support.

However, the challenge for traders is that USDJPY didn’t offer a retest of 130.60 as new resistance, at least not yet.

The 126.70 area should offer support if tested this week, considering it’s the May 2022 swing low.

A bounce from there could take USDJPY back to the confluence of resistance at 130.60.

Regardless of the short-term action, USDJPY is on my watch list, given the textbook technicals.

USDCAD Forecast

I wrote about USDCAD on Friday and how the pair is approaching a massive support level.

The 1.3300 area will likely attract buyers if tested this week, given that it’s the trend line from July 2021.

Not only that, but the level has been highly influential since it established itself in September 2021.

Bullish price action from 1.3300 would send USDCAD higher, potentially back to 1.3570.

Alternatively, a close below 1.3300 would open up lower levels, including 1.3320 and possibly 1.3020.

S&P 500 (SPX500) Forecast

The SPX (S&P 500 futures) is approaching a massive resistance level.

The 4,020 area is the trend line from the all-time high and will be a factor this week.

A retest of 4,020 will undoubtedly attract selling pressure. The question is, will bulls finally manage a daily close above it, or will it trigger a bearish reversal as it has for months?

Bearish price action from 4,020 will suggest a reversal, while a daily close above that mark would confirm the break and expose 4,140.

Although it’s not apparent from the daily time frame, 4,140 is a massive monthly level for SPX.
Key support for the S&P 500 comes in at 3,910.