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Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
The EURUSD spent most of last week consolidating after Monday’s 100-pip rally.
You can see how the pair has carved lower highs since Tuesday’s session, but buyers are managing to keep prices above that 1.1170/80 support area.
This coiling action could lead to a breakout opportunity in the days ahead.
However, until we see the EURUSD break free from this consolidation, it may be best to look elsewhere.
The euro has lacked direction for the majority of 2019.
Furthermore, this sideways price action isn’t conducive to buying or selling the EURUSD, in my opinion.
As I stated last week, a close above 1.1250 would expose 1.1280 and perhaps the range ceiling at 1.1410.
Alternatively, a close below 1.1170/80 would take the pair back to 1.1110 support.
The GBPUSD broke through horizontal support at 1.2110 on Friday.
This area had supported the pair between the 1st and 8th of August.
With GBPUSD now well below this area, I would expect any retest of it to encounter selling pressure.
But I would be careful about getting too bearish here at the moment.
As you can see in the chart below, we have a descending channel in play that extends from the May low.
The pair ended the week just above this channel support near 1.2000.
However, this is not something I would buy, though, at least not without seeing more from buyers.
If we do see the pair bounce from channel support, I would want to see buyers close GBPUSD back above 1.2110 before considering a long position.
Alternatively, bearish price action from 1.2110 could present a selling opportunity.
But again, I would keep one eye on channel support in case buyers want to take the pair higher this week.
USDJPY continued to look weak even into Friday’s close.
Despite bouncing aggressively on August 6th from the 105.60 area, USDJPY bulls have struggled and even lost additional ground on Friday.
That said, the pair did recover back above 105.60 before the weekend.
Furthermore, USDJPY is testing descending channel support that extends from the March low.
I’m certainly not in a hurry to buy the pair, though.
The market has been trending lower since April and has looked progressively weaker in recent weeks.
This is one of those situations where the best trade may be no trade at all, at least until we have a clear price action signal.
I’ve written about AUDUSD several times in recent weeks.
The first was on July 24th when the pair was in the process of breaking below ascending channel support.
Our target was 0.6750. Sellers reached that level on August 5th.
The pair spent some time below 0.6750 on the 7th, but buyers stepped in quite aggressively to close the market back above the level before the New York 5 pm EST close.
That re-exposed the 0.6830 resistance area.
I wrote about this idea on August 7th.
We haven’t seen this level come under pressure just yet, but I wouldn’t be surprised to see a 0.6830 print this week.
As long as AUDUSD is above 0.6750 support, I have to respect the potential for further gains.
But it’s going to take a daily close above 0.6830 to expose the next key resistance at 0.6910.
Alternatively, further weakness toward 0.6750 would be a sign of weakness.
NZDUSD was another great performer in late July and early August.
I wrote about the short idea on July 29th.
The following close below that 0.6630 support level exposed our target at 0.6490.
Sellers reached that area on August 5th.
We were then watching for a retest of the 0.6590 area as new resistance for a second short opportunity.
NZDUSD reached 0.6590 on August 6th, but unfortunately, I wasn’t quick enough and missed the entry.
Last Wednesday’s session closed below that 0.6490 level which is why we saw sellers defend it on Thursday and Friday.
However, NZDUSD is still hovering just below 0.6490 resistance.
So although sellers are defending it for now, buyers are doing their part to keep the pair above the next key support at 0.6420.
This is another situation where I’d like to see more from buyers or sellers before I make a decision.
A daily close back above 0.6490 would be bullish and could re-expose the 0.6590 resistance area.
Alternatively, a close below 0.6420 would extend losses toward the 0.6350 support region.
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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