Daily Price Action
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Weekly Forex Forecast (February 18 – 22, 2019)

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EURUSD looked as confused as ever last week.

Just when it seemed like Tuesday’s bullish engulfing candle would take prices higher, Wednesday’s session erased all of those gains and then some.

It’s a degree of indecision that has plagued the single currency since October 2018.

In fact, I could argue that EURUSD has been in consolidation mode since May of last year. That’s when this choppy price action began.

With that in mind, I think it’s wise to limit expectations. These market conditions are not conducive to 400-pip targets.

Something closer to 100 pips or 150 pips at most seems more appropriate.

That’s exactly what we may see from EURUSD if the 1.1215/40 support area can trigger a bounce over the coming sessions.

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Should buyers take the euro higher this week, a target near 1.1450/80 would make sense given the descending channel that is now visible.

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EURUSD descending channel on daily time frame

GBPUSD has been another tough pair to read this year.

We’ve seen a couple of false breaks from the pair just in the last six weeks.

But more than that, the erratic price action in 2019 makes GBPUSD less than ideal for trading. The same can be said for EURUSD.

The false break above descending channel resistance last month is indicative of continued weakness.

Of course, it’s going to depend on how the market reacts to the 1.3000 area if and when tested as new resistance.

Bearish price action such as a pin bar from that area could trigger a move lower.

Although a daily close back above 1.3000 would be bullish, I wouldn’t be a buyer given how the level already failed to serve as support earlier this month.

Key support for the week ahead comes in at 1.2700. I’d also expect to see bids crop up on a rotation lower toward last week’s low near 1.2780.

GBPUSD daily chart with support and resistance

USDJPY has been in rally mode since the January 3rd flash crash that rocked the yen pairs.

I wrote about USDJPY on Wednesday of last week. Buyers had just broken above 110.00 and looked poised to challenge the next key resistance at 111.40.

But as I wrote last week, that 111.40 resistance level could be as high as 111.70.

USDJPY bulls struggled on Thursday, and even Friday’s session didn’t show much resilience from buyers.

That said, as long as the pair is above the 110.00 support area on a daily closing basis, the short-term rally is intact.

I won’t attempt shorting USDJPY from 111.40/70 unless I see bearish price action such as a pin bar.

It’s too risky to sell into this rally without some form of confirmation in my opinion.

An alternate approach is to watch for a buying opportunity from the 110.00 support area. But again, I’d prefer to see a price action signal first.

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

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USDJPY support and resistance areas on daily chart

CADJPY carved a bearish engulfing pattern last Thursday.

A formation like that at or near a swing high usually suggests buyers are exhausted.

However, the markets have been difficult to read so far in 2019.

We’ve already seen several candlestick patterns fail this year, not to mention the false breaks on the daily and even weekly time frames.

With that in mind, I’m not sure sellers will be able to keep CADJPY below 83.80 this week.

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If they fail to do so, there is a much more significant resistance level closer to 84.50.

It’s the former channel support from the 2016 low. Between 83.80 and 84.50, I’d much prefer shorting CADJPY from the latter.

Not only because it would offer a more favorable risk to reward ratio, but because 84.50 is a more significant level in my opinion.

Key support comes in at 81.90 and 80.55. But as I wrote last week, bounces are likely while above 82.90.

CADJPY key resistance area

On February 3 I pointed out a key support level on Gold (XAUUSD) at 1300.

The significance of the level isn’t apparent from recent price action.

However, a study of the movement between February and June of last year illustrates why I liked 1300 as support.

Since then gold has tested the area several times. The market has also consolidated nicely above the region since late January.

But Friday’s rally suggests the consolidation may have come to an end.

If so, we could see gold extend recent gains above key resistance near 1320/5. That would expose the next resistance area between 1350 and 1360.

Just bear in mind that it’s going to take a daily close above 1320/5 to secure the breakout. Until then, the area will continue to attract sellers.

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Gold uptrend with support and resistance levels

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.

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  • Emuobo says:

    Thanks

  • Ijaz says:

    Great

  • Esi says:

    thank you sir

    • Justin Bennett says:

      You’re welcome.

  • Patrick says:

    Thanks big up on the week ahead guys lets all win

  • Paul says:

    Thanks sir..what do you think about USD/CHF pair Friday rejection candle.?

  • Peace says:

    Your analysis is look great…especially Usdjpy is going to be nice long term sell after pullback touches on 111.40 resistance

  • Victor Ojo says:

    ”However, the markets have been difficult to read so far in 2019.

    We’ve already seen several candlestick patterns fail this year, not to mention the false breaks on the daily and even weekly time frames”.
    That’s sincerity on your part mentor. I love that, keep the good works on. Thanks

    • Cheers, Victor. It’s always okay to say “I don’t know” as a trader. Nothing wrong with it. But when you do, it’s a sign that conditions are unfavorable which means you may want to stay on the sideline.

      Have a good week.

  • Austen says:

    Thanks again

  • chim says:

    thanks mate.
    I have been patiently waiting for this week analysis.
    thanks again.

  • joel says:

    thanks

  • Isaac morah says:

    Justin I have a question concerning gold, sir the last resistance level 1320 resistance you plotted shouldn’t it be a swing high ? As gold is progressively making new higher highs and if it looks on the weekly price is heading towards the all time weekly resistance. Your response is deeply appreciated

    • Today is making a new multi-month high, and the rally is intact.

      Old resistance becomes new support. That’s what we’re watching for with gold.

  • sthembiso says:

    eu really looks like a buy on market open

  • POLA P says:

    ” degree of indecision..”
    “limit expectations…”
    I hear MR.
    THANKS!!

  • Adebayo saheed says:

    Thanks …your analysis are good

  • MM says:

    Thank You, Justine. I am becoming more profitable because of your Analysis. 🙂

  • cK says:

    Thank you Justin 🙏

  • Mojalefa Jacob says:

    Thanks sir until next time we really appreciate your help god bless

  • re zheg says:

    Thanks you

  • Jaja_Grande says:

    Morning House. I just wanted to ask Justin the time Frame he uses to enter the market

  • Chalo says:

    Thanks for very clear analysis, i can see Gold behaving just like what you said.

  • Akeem says:

    I’m not suprise bcos the market is dynamics

  • Samuel says:

    Thank you very much for this week Analysis.God bless you Sir.

  • Arup Wardi Suwardi says:

    Nice report.

  • derrick says:

    thanks very much i i had missed going through this forecast Sunday night

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