Daily Price Action
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Weekly Forex Forecast (April 8 – 12, 2019)

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EURUSD carved one of its more narrow ranges last week.

In fact, the single currency ended the week just 12 pips below Monday’s open.

I pointed out this 1.1180/90 support area last week. The area triggered the early March bounce and also illustrated a multi-year low for EURUSD.

However, last Tuesday’s bounce from 1.1180/90 wasn’t very convincing.

The start of Wednesday’s session looked promising for bulls, but the relief rally faded in the final hours.

The selling pressure continued through the final 48 hours of the week resulting in more indecision.

I expect EURUSD to remain range bound moving forward.

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The trend line from the March 2018 high will likely continue to attract sellers while any retest of 1.1180/90 may be attractive to buyers.

It’s going to take a daily close below 1.1180 to expose the November 2017 trend line which comes in near 1.1060.

All in all, I think EURUSD will continue to be a difficult pair to trade, but the bearish narrative is alive and well.

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EURUSD falling wedge pattern

On March 28th I wrote a post about the end of the GBPUSD relief rally.

It was a bold title, but I had my reasons for writing it.

The way the pair had started to lean on the trend line from the year-to-date low suggested an imminent breakdown.

And in my opinion, that trend line was the only thing supporting the rally efforts so far in 2019.

But GBPUSD bulls aren’t going down without a fight.

I wrote about the 1.3000/10 support area a couple of times last week.

You can see how this region has triggered the last few 100 to 200 pip bounces.

However, at the same time, our former trend line support is now serving as new resistance hence last week’s selloff from 1.3180.

Until sellers can clear the 1.3000 region on a daily closing basis, the GBPUSD is susceptible to bounces from support.

That said, the way the pair sold off on Friday tells me that a breakdown may not be far away.

We’ll see how this week plays out, but I’ll remain bearish GBPUSD while below the year-to-date trend line.

GBPUSD trend line on the daily chart

I’ve been reluctant to discuss USDJPY recently.

Although the pair is moving between horizontal support and resistance relatively well, the market’s structure isn’t all that convincing.

More specifically, the selloff near the end of March appeared to signal a more significant correction was underway.

As you can see, that never happened.

That isn’t necessarily a “bad” thing, but it does make USDJPY a trickier pair to trade in my opinion.

In fact, with the exception of maybe CADJPY, none of the yen pairs have been all that appealing in 2019.

However, that late March bounce is a sign of strength, at least for now.

But Friday’s session ended just below a pivotal area for USDJPY.

The 111.80/90 region capped the pair throughout the first half of March. It did the same thing in August and September of last year.

That means USDJPY buyers need to clear the 111.80/90 resistance area on a daily closing basis if they want to extend this year’s rally.

Remember that I use New York close Forex charts so that each “daily” session closes at 5 pm EST.

These charts are required for trading price action on the higher time frames.

A close above 111.90 would expose the area just above the 113.00 handle.

Alternatively, bearish price action such as a pin bar or engulfing pattern from the 111.80/90 region would expose key support at 111.00.

IMPORTANT: I use New York close charts so that each day closes at 5 pm EST.

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USDJPY horizontal support and resistance

GBPNZD has been consolidating for months.

Ever since the pair bounced from channel support last December, it has churned higher by 1,200 pips.

During that time, the pound cross has carved a rising wedge.

I wrote about this pattern on March 26th.

The idea was to watch for a daily close below support. That would set us up with a favorable opportunity to get short.

However, that hasn’t happened yet.

As you can see from the chart below, GBPNZD continues to trade within the confines of the multi-month wedge pattern.

But like any terminal pattern, this one must give out eventually.

We’ll have to wait and see whether support or resistance gives out first.

If I had to guess, I would say the price action since last October hints at a bearish move.

We’ll see if the market agrees with that outlook.

One thing I like about this idea is that the target for any short here is approximately 700 pips below the wedge floor.

That makes GBPNZD one to keep an eye on.

GBPNZD rising wedge on the daily chart

I wrote about this ascending channel on WTI crude oil on April 2nd.

It isn’t the most obvious channel I’ve seen, but the confluence of resistance at 63.70/80 is undeniable.

There are three reasons why I like the 63.70/80 area. Here they are:

1) It’s the level that provided support for crude oil in June and August of last year.

As we know, old support becomes new resistance. So the fact that this area served as support last year means it will likely act as new resistance this year.

2) The 63.70/80 area lines up nicely with what could be ascending channel resistance.

It isn’t the most established channel, but resistance could become a factor nonetheless.

3) The 61.8% Fibonacci of the aggressive selloff that commenced last October comes in at 63.60.

That selloff took oil from 76.70 to 42.40 in less than three months. It’s significance, and resulting Fibonacci levels should not be discounted.

Those are three valid reasons why this market may begin to struggle as it approaches the area between 63.70 and 63.80.

But given the bullish momentum we’ve seen since last December, it would be wise to let the market make the first move here.

In other words, wait for bearish price action such as a pin bar or engulfing pattern.

Without a sell signal of some sort, shorting crude oil is a risky endeavor even at a confluence of resistance like that of 63.70/80.

Also, while this ascending channel is intact, it may be best to stick with buying the market from support.

As always it depends on your trading style and risk tolerance.

Key support for the week ahead comes in at 60.30.

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WTI crude oil ascending channel

About the Author Justin Bennett

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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