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After hovering below the March 2018 trend line for a few days last week, the EURUSD broke out on Friday.
But we’ve been here before.
Euro bulls broke this same trend line on March 20th yet failed to hold onto it as new support.
By March 22nd, EURUSD was back below it on a daily closing basis.
We’ll see if this time is different.
For that to be the case, buyers need to step in at 1.1270 this week.
If they can do that, the EURUSD could be on its way to retest the short-term resistance at 1.1420.
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Alternatively, a daily close back below the 1.1270 region would expose the 1.1180/90 horizontal support area.
Make sure you’re using New York close Forex charts so that each 24-hour session closes at 5 pm EST.
When dealing with indecisive markets like this, it’s often best to use half-sizedhttps://www.blueberrymarkets.com/lp/dailypriceaction or even quarter-sized positions and then scale in once the market validates your idea.
Doing nothing and looking elsewhere is always an option too.
The GBPUSD price action of late is the definition of indecision.
In fact, last week’s 115 pip range was the pair’s smallest so far this year.
You can see where buyers have continued to step in above the 1.3000 support handle. This is a level I’ve mentioned several times in recent weeks.
And at the other end, GBPUSD sellers have stepped in at former trend line support near 1.3180.
I’ve removed that level for now given that it probably won’t be a factor again until 1.3350 if at all.
If we take a look at the price action since the 2019 high at 1.3380, we find a descending trend line that could prove helpful in the short-term.
It seems this level is the only thing that prevented the pound from appreciating last week, at least from a technical point of view.
With all that in mind, I think this is a wait-and-see market.
The current range here is too narrow and the price action too sporadic to think about buying or selling.
However, a daily close below the 1.3000 support area or above this short-term trend line resistance near 1.3100 could change that.
The USDJPY is another currency pair facing some indecision.
However, despite the sideways movement, the pair is respecting key horizontal support and resistance incredibly well.
I wrote about the 111.80 resistance area in last week’s forecast.
And as you can see, USDJPY sold off from there last week.
The pair also caught a bid at the 111.00 handle which is another level I wrote about last Sunday.
We’ll see if Friday’s break above the 111.80/90 resistance area holds as new support this week.
If it does, the USDJPY could be on its way to 113.20.
In fact, there’s a good chance the pair could tag the multi-year high at 114.50 as long as buyers do their part this week.
On the flip side, a daily close back below 111.80 would re-expose 111.00 and perhaps 109.70.
I wrote about the AUDUSD on Friday.
The pair had entered breakout territory just before the weekend. That area, in my opinion, lies above 0.7170.
That level is the top of a descending channel that has been in place throughout 2019.
Although it wasn’t a massive selloff, AUDUSD did pullback some just before the closing bell on Friday.
That pullback puts the pair right at our key area of 0.7170 to begin the new week.
In situations like this, I prefer to let the first 24 hours dictate whether last week was a clean break or not.
At a minimum, I’d like to see the first few 4-hour candles hold above the area.
If buyers can’t maintain prices above the 0.7170 region, we could see AUDUSD slip back inside of this channel and trend lower.
But if AUDUSD bulls can follow through on Friday’s strength, the pair could be on its way toward 0.7330 this week.
As always, time will tell.
Gold (XAUUSD) has been one of the better performers for us in 2019.
First there was the breakdown in late February that reached our 1280 target in record time.
Then there was the March 27th break that hit the same target at 1280 by the 4th of April.
Despite a bounce from 1280 earlier this month, gold bears regained control last Thursday and again on Friday.
That weakness re-exposes 1280 support once more.
It’s going to take a daily close below the 1280 handle to open up downside targets including 1260 and perhaps 1240.
Keep in mind, though, that there is a trend line that extends from the 2018 low that could become a factor here.
I will provide an update to include that trend line if and when it becomes a factor.
We’ll have to keep an eye on how things develop here, but right now all eyes are on 1280 and whether or not buyers can step in once more this week.
Given the lower highs since February, a break lower seems likely.
Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.Read more...
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