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Last week, we discussed a EURUSD short idea.
At the time, the euro was trading above the confluence of support at 1.1250/60.
You can see the horizontal level in this area along with ascending channel support that extends from the May 30th low.
However, Friday’s sub 1.1250 close means that any retest of the area as new resistance is likely to encounter selling pressure.
Keep in mind that the area could be as high as 1.1270.
As long as EURUSD stays below 1.1270 on a daily closing basis, I favor shorting the pair for a move to the next key support at 1.1110.
The 1.1110 level triggered the bounce in late May and early June. It’s also the year-to-date low.
With that in mind, I expect buyers to take an interest in the event of a retest.
But another bounce from 1.1110 may only serve as temporary relief for the single currency.
As of now, the downtrend that began early last year is still very much intact.
I also don’t see any reason to think that sellers are tiring, especially after giving up the 1.1250/60 support area last week.
GBPUSD sellers have failed to close the pair above 1.2760.
This is the resistance area I’ve discussed several times in recent weeks.
Friday’s session tested key support at 1.2480, but sellers have yet to clear the level on a daily closing basis.
From here, I’d like to see a daily close below 1.2480 followed by a retest of the area as new resistance.
That would expose the next support area near 1.2120. However, I also think 1.2330 could attract a few buyers on the way down.
USDJPY bulls were on the move on Friday.
The 60+ pip gain puts the pair just below key resistance at 108.70.
Given the late-week surge, it seems USDJPY is ready to turn higher this week.
However, Friday moves are sometimes deceiving. Furthermore, buyers still need to clear 108.70 on a daily closing basis to expose higher levels.
The first area above 108.70 comes in at 109.70.
Alternatively, a turn lower this week would likely encounter support at 107.60.
I wrote about GBPNZD several times throughout April and May.
The pair had carved a rising wedge on the daily time frame which usually signals a turn lower.
However, the pair closed above wedge resistance on May 1st.
But as you may well know, I never buy topside breaks of ascending levels. That’s because they have a high failure rate.
The GBPNZD breakout on May 1st was no exception.
The pair spent nine days above the wedge top before closing back below it on May 14th.
We then got the break below wedge support on the 23rd of May. That breakdown triggered a steady fade into the 1.9050 region.
With the June 26th close below this area, I would expect any retest of 1.9050 up to 1.9100 to be met with selling pressure.
And as long as GBPNZD remains below 1.9100, my sights are set on the next key support at 1.8630.
CADJPY broke above a key area on Friday.
You can see how 82.70/80 has served as a pivot for the pair since January of this year.
We’ll see if buyers can defend the 82.70/80 as new support this week.
If they can, we could see the CADJPY trend higher toward the 84.00 handle.
Alternatively, a close below 82.70 would negate the bullish outlook.
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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