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EURUSD continues to be a difficult pair to trade.
That’s evident by the chart below. Since October of last year, the euro has been locked in a relatively narrow range with no clear directional bias.
However, the longer term trend remains bearish which is why recent EURUSD rallies have struggled to gain traction.
One area I’ve mentioned a few times is the 1.1450/80 resistance area.
Buyers managed to break through it on January 9th, but failed to defend the area as new support on the 11th.
As such, the 1.1450/80 area is once again serving as resistance per last week’s price action.
Key support comes in just above 1.1400. It isn’t what I would call a “key” support like that of 1.1300, but it is a region that could attract buyers this week.
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I will continue to monitor EURUSD. That said, I think there are better opportunities out there at the moment.
For the last week, GBPUSD has been testing a key support area.
I first discussed the idea of a bullish pound on January 15th. The outlook was contingent on the reaction to the Brexit vote.
Buyers held their ground and are now up more than 400 pips since the January 15th low.
GBPUSD bulls also took out descending channel resistance on the 25th of last month. I pointed out this new support area last Sunday.
The support zone turned out to be a bit lower at 1.3050 rather than 1.3100. But regardless, the bullish outlook is still intact.
Since January 28th, GBPUSD has been consolidating. That isn’t surprising given the 800 pip run-up over the last four weeks.
From here, I’ll be watching for bullish price action above 1.3050.
If we get a bullish pin bar or engulfing pattern, there’s a good chance we’ll see GBPUSD continue higher toward the 1.3260 resistance area.
A daily close above 1.3260 would open the door to the next resistance at 1.3450.
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On the flip side, a daily close below former channel resistance (new support) near 1.3050 would negate the bullish outlook.
As long as buyers are in control, my target will remain the 1.3450 region.
On January 4th I pointed out an NZDUSD bullish pin bar on the weekly time frame.
Since then the pair is up nearly 200 pips.
We also discussed how buyers needed to overcome 0.6850 resistance on January 28th.
I wasn’t a fan of selling NZDUSD though given the price action since early 2019.
That turned out to be the right decision as buyers took out 0.6850 on the 30th of January.
As we all know, old resistance becomes new support. That brings us to the plan for the coming week.
A retest of 0.6850 as new support could present a favorable buying opportunity.
Of course, waiting for bullish price action following the retest of 0.6850 would make the trade idea much more appealing.
Key resistance for the week ahead comes in at 0.6970.
I’ve mentioned USDCAD a few times over the last four weeks.
The initial short setup materialized following a retest of ascending channel resistance near 1.3650.
Since then, USDCAD has fallen more than 400 pips.
For those who missed the setup in early January, there was another chance at a short that I mentioned last Sunday.
The pair had carved a smaller ascending channel following the January 11th low.
As such, the 1.3280 area became new resistance. USDCAD tested the new resistance area on Monday and Tuesday of last week carving a high of 1.3285.
Now that the pair has reached my target at 1.3060, it’s time to see how the market reacts to the larger ascending channel support just below 1.3000.
Gold has been in rally mode since reaching a significant low in August 2018.
The price action here has been relatively predictable.
As you can see from the chart below, the market has been respecting our horizontal levels incredibly well over the last six months.
Just last week, buyers hit a key resistance level at 1325. The area served as a pivot for gold during the first few months of last year.
If recent price action is any indication, we could see the market pullback this week.
But any pullback into new support near 1300 could present the next buying opportunity for a move back to 1325.
Alternatively, a daily close above 1325 would open the door to the 1350 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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