Daily Price Action
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Weekly Forex Forecast (December 3 – 7, 2018)

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We’ve now witnessed two false breaks from EURUSD in the last couple of weeks.

The first was the daily close above 1.1430 on November 19th.

Buyers surrendered those gains the very next day. The result was a bearish engulfing pattern.

Last Tuesday’s close below 1.1300 was the second false break.

It was almost the inverse of the bullish break on the 19th. This time, sellers surrendered the next day. The outcome was a bullish engulfing pattern.

All of this illustrates one thing: indecision.

It isn’t too surprising though, particularly when you factor in the time of year.

The U.S. Thanksgiving holiday in late November has historically signaled the beginning of the holiday lull. And it usually lasts until mid-January.

That doesn’t mean there aren’t any opportunities in December.

However, it does suggest that patience is more important now than ever before. Reducing your position size when you do trade isn’t a bad idea either.

So more patience and less risk.

That’s a simple yet effective formula you can employ whenever a market becomes this indecisive.

For the week ahead, I’m still using 1.1300 as support and 1.1430 as resistance.

But we’ve already seen false breaks of both levels.

With that in mind, I won’t be trading EURUSD unless I see favorable price action that warrants a position.

I also need to see the pair break free from the current range which has become choppy and unappealing in recent weeks.

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

Click here to get access to the same charts I use.

EURUSD key levels on the daily chart

The GBPUSD continues to be a tricky pair to trade in my opinion.

On the one hand, you have an increase in volatility due to ongoing Brexit rhetoric.

That alone can make trading the pound trickier than usual.

But more importantly is the fact that GBPUSD is technically unattractive.

While the downtrend that began in April is intact, the pair has been sideways since mid-August.

If you prefer trading ranges, the 560-pip range between 1.2700 and 1.3260 might be an option for you.

However, given the series of lower highs last month, I’m not sure how much longer buyers can hold onto the 1.2700 support area.

With that in mind, I have no intention of trading GBPUSD as long as 1.2700 is intact.

In other words, I need to see a daily close below the level first.

Keep in mind I use New York close charts so that each 24-hour period closes at 5 pm EST. You can go here to get access to the same charts I use.

If sellers can clear it on a daily closing basis, we may have a short opportunity.

Just keep in mind that the Brexit saga isn’t going away anytime soon.

Be sure to check out my November 27 commentary. It explains the significance of 1.2700 support and the implications of a daily close below the level.

GBPUSD key levels on the daily time frame

USDJPY has been consolidating since carving a new 2018 high in October.

Since then, we’ve witnessed a stalemate between buyers and sellers.

You can see how the recent price action has formed an upper trend line that extends from the year-to-date high.

On the other end, we may have a trend line support from the August low.

These two levels form what could be a wedge pattern.

That said, I have a lot more confidence in the upper level than the lower one.

Resistance has three points already while the support level you see below only has two.

So for now, trend line support is conditional. I’ll have to wait and see how the pair reacts if and when it moves lower to test trend line support.

We may also have an opportunity to watch for a buy signal following a daily close above trend line resistance. As of now, that level comes in just below 114.00.

Just keep in mind that 114.00 is dangerously close to the year-to-date high at 114.50. That doesn’t leave much room for longs.

With all this in mind, I’d say USDJPY is one to keep an eye on, but more patience is needed while buyers and sellers work out their differences.

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USDJPY key levels

NZDJPY buyers finished last week with a significant breakout.

I mentioned the descending channel from the July 2017 high last Monday. At the time, 77.30/40 was resistance.

Despite my mostly neutral stance, I was leaning toward a slightly bullish outlook.

Here’s what I wrote on November 26th:

My only reason to lean toward a bullish outlook is the fact that NZDJPY is coming off the bottom of a 1,150-pip range that has been in place since 2015.

Sure enough, buyers cleared the 77.30/40 resistance area last Wednesday.

I wrote about the breakout on Thursday and pointed out how 77.30/60 was now serving as support.

However, I was waiting to see if NZDJPY could clear this area on a weekly closing basis.

Bulls got the job done closing the pair near weekly highs.

That gives me more confidence about the bullish breakout as we enter a new week.

As long as NZDJPY holds above the 77.30/60 area, I will remain bullish.

Key resistance comes in at 79.30, 81.30 and 83.70. The latter is the high of the descending channel as well as the ceiling of a 1,150-pip multi-year range.

NZDJPY breakout on daily chart

EURAUD is fast approaching a key support level.

In fact, Friday’s last-minute selloff puts the euro cross just 30 pips above channel support that extends from the year-to-date low.

It’s going to take a daily close below the 1.5440 area to expose the January low at 1.5150.

For member’s, 1.5440 is actually a profit target.

I posted a EURAUD short opportunity in the member’s area back on October 18th.

At the time, the pair was trading 650 pips higher at 1.6117.

Member's area post

Notice the post above also included EURNZD as the two (EURAUD and EURNZD) like to move together.

But EURNZD reached its 700-pip target on November 8th and is now more than 1,000 pips lower since the comment I made in October.

Given the way EURAUD ended last week, I’d say a breakdown isn’t far away.

I do expect to see a few bids around the 1.5440 area. But any buying here will likely only serve as a temporary pause in the recent downtrend.

This will be one of the more favorable opportunities in December in my opinion. Just keep in mind that sellers need to clear 1.5440 first.

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

Click here to get access to the same charts I use.

EURAUD 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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  • Richard says:

    Thank you for the analysis

  • rioma says:

    thank you for great analysis sir

  • Roy says:

    EURAUD. Locked and loaded

  • Msipa B says:

    May I have your MAs, I mean description and values

  • karimomed says:

    Merci pour cette analyse

  • MIMI says:

    Much appreciated as always!

  • Rabani says:

    Thanks alot with your nice analyse and help.

  • Sumantra kumar halder says:

    Nice analysis

  • Martin says:

    I do appreciate your efforts to educate us,God bless you.

  • Sulaiman says:

    Justin I’m not trade live account but God will provide a way for me to fund my real account you are serious forex trader I’m always enjoy your analysis comment thanks sir

  • Jenerali says:

    eyes on EURAUD and EURNZD

  • POLA P says:

    Thanks Mr Bennett

  • Paul McDonald says:

    Amazing help for new traders like myself

  • Onoja Niza says:

    Thanks bro for the weekly pointer. God bless you

  • onyekaba chukwumah says:

    good analysis and cautious advise. Thanks.

  • Arif says:

    Terimakasi atas analisa ya pak justin🙏🙏

  • Johnny M says:

    Hi Justin, could you comment on XAUUSD please, thanks.

  • Micheal Stanley says:

    Thanks boss… That’s insightful

  • vunghia says:

    Thanks

  • Ken says:

    Thanks

  • Millard J Melnyk says:

    Justin, I’m following GBPUSD. What’s the next support level should we clear 1.2700 on a daily basis? I’m testing a theory that indicates we’re going to break 1.2700 and want to place a take profit for my short position in case we get a quick dip just before consolidating.

  • gito purnono says:

    Thank yuor for analisys

  • Austen says:

    Thanks a lot

  • Samuel says:

    Thanks a lot for this week analysis.i’m really grateful for all your generosity.

  • Sy ha says:

    Thanks you very good

  • OGBORO preciouslife says:

    Waoo

  • Kingsley says:

    Your analysis excites me. Always reading your page religiously.

  • Nono Darsono says:

    great analysis that is very petrified analysis

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