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The EURUSD isn’t surprising anyone just yet.
Predictably, last week was another failed attempt at a move higher.
I wrote about the bullish candle on May 23rd.
It was a potential double bottom, but buyers needed to clear that 1.1260 area before we could confirm the reversal pattern.
Last week didn’t even come close.
But that doesn’t mean we got burned. I told members on the 27th that I would not be buying EURUSD.
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Here’s what I wrote in the member’s area:
I haven’t been a fan of the pair throughout 2019.
I also didn’t want to fight the downtrend that’s been in place since February of last year.
And it’s a good thing I avoided buying EURUSD last week too.
The week ahead will be all about that multi-year support at 1.1110. As long as it holds, buyers have a fighting chance.
As for resistance, all eyes are on the 1.1260 region.
The GBPUSD followed last week’s gameplan perfectly.
Last Sunday I wrote about how the resistance area that began at 1.2740 was likely to attract sellers.
Monday carved a 1.2747 high before losing nearly 200 pips as of Friday’s low.
Furthermore, the 1.2600 support level I wrote about last Sunday held as support last week on a daily closing basis.
Notice how sellers failed to close GBPUSD below 1.2600 on Thursday and Friday.
That leaves us with a similar range for the week ahead.
This time, though, resistance is closer to the 1.2700 handle with support again at 1.2600.
All that said, I’m still not a fan of trading GBPUSD.
Sure, the pair may continue lower, but the technicals here don’t fit my criteria for a favorable entry.
I also think there are better opportunities out there.
Of course, that doesn’t mean GBPUSD isn’t tradable for you.
USDJPY bulls had another rough week.
The risk-sensitive pair closed 160 pips off its high. It also broke a key support level at 108.70.
You can see where this area served as a pivot in January.
Friday’s sub 108.70 close means the pair will likely encounter selling pressure on any retests of the area as new resistance.
Just like some of the other yen pairs we’ve discussed recently, I think that January 3rd close at 107.60 will attract buyers.
But I doubt that will be enough to stop the bleeding.
I favor selling USDJPY this week on any strength into that 108.70 region for a move to the next key support at 107.60.
A close below that would expose the year-to-date low at 105.60.
Alternatively, a daily close above 108.70 would turn our attention to those recent lows near 109.15.
I wrote about EURJPY twice last week.
The first post was on May 27th when I noticed that the pair was holding below new resistance at 122.65 on a daily closing basis.
That’s the January 3rd flash crash close, in case you’re wondering.
My second post came just 24 hours later when EURJPY was selling off from the 122.65 level.
That move lower also confirmed the sell signal in the form of consecutive inside days on the 24th and 27th.
In other words, there were two opportunities to short EURJPY last week.
The first target for a move lower was the 121.00 handle.
If you look at an intraday chart of EURJPY, you’ll see where the pair bounced from this 121.00 region on Friday.
However, sellers made quick work of those bids.
I even commented to members that I felt more downside (below 121.00) was likely considering the amount of selling pressure on Friday.
I like EURJPY lower this week, but it will be interesting to see how the pair reacts to 121.00 on Monday.
All in all, though, any bounces from support present selling opportunities, in my opinion.
EURNZD has been on our radar for several weeks.
Initially, we were looking to short the pair following a close below ascending channel support.
The idea was in play as long as 1.7120 resistance was intact on a daily closing basis.
However, EURNZD had other plans.
They managed a daily close above 1.7120 on May 21st.
But despite what appeared to be the next leg up, I wasn’t interested in buying EURNZD.
Just like the GBPNZD false break at 1.9660, I felt that EURNZD was setting the stage for a head fake of its own.
Sure enough, the pair closed back below 1.7120 just three days after closing above it on the 21st.
That was our cue to start looking for shorts on retests of 1.7120.
The price action between Thursday and Friday of last week carved a bearish inside bar pin bar combination.
It illustrates just how much selling pressure there is sub 1.7120.
It also appears that EURNZD closed right on channel support or just below it.
I’m still holding short here and will add to my position following a convincing close below channel support near 1.7080.
Key support on the way down comes in at 1.6730 with a minor area at 1.6930.
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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