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I ended last week with a post about the indecisive EURUSD.
As uneventful as the last few months have been, this week could hold the key to a significant moment for the single currency.
As of Friday’s close, EURUSD is only 30 pips below a critical resistance level.
I’ve written about this falling wedge several times in recent weeks including last Tuesday, March the 12th.
As long as this resistance level is intact on a daily closing basis, sellers are in control.
However, if euro bulls manage a daily close above wedge resistance near 1.1340/50 this week, we will likely see the EURUSD turn higher.
Just remember, though, that this wedge has another two months of real estate left.
That means the pair could technically wait until the end of May to break free.
Or it may not break to the upside at all. That’s the game of probabilities we play every week.
For the week ahead, key resistance comes in at 1.1340/50 with support significantly lower near 1.1200.
Market-moving events this week including Wednesday’s Fed rate decision and statement at 2 pm EST and Friday’s slew of PMI readings out of Europe.
Despite some weakness on Thursday, GBPUSD bulls had a big week.
They managed to gain 330 pips from Monday’s gap-down open and even cleared the late-January swing high at 1.3200.
You can see how this level attracted a bid before the weekend.
Remember that I use New York close charts so that each 24-hour session closes at 5 pm EST.
Click here to get access to the same Forex charts I use.
As for the pound’s immediate path forward, it’s a mixed bag in my opinion.
I see the potential for further gains, but I also suspect we’ll continue to see more of this volatile back-and-forth price action.
That alone makes GBPUSD a tricky pair to trade; more so than even EURUSD in my opinion.
But the broader technicals here do look constructive.
Be sure to review last Wednesday’s post. It reveals a longer-term price structure that could be worth keeping an eye on as we move forward.
Immediate support for the week ahead is 1.3200 with key resistance coming in at 1.3440.
The USDJPY short-term uptrend is still intact despite some trouble on Friday.
Since January 3rd, the risk-sensitive USDJPY and other yen pairs have been trending higher.
However, buyers hit a brick wall at 111.90 in early March.
The pair even carved a sell signal on the 5th which triggered a 100-pip decline.
You can see how USDJPY bulls struggled last Friday once again at the 111.90 area.
But the fact is that buyers are still carving higher highs and higher lows.
Until that changes, the bullish momentum is alive and well.
Only a daily close below support at the 111.00 handle would suggest a turn lower.
Alternatively, it’s going to take a daily close above the 111.90 area to expose the next key resistance at 113.20.
It’s difficult to see at first glance, but the 113.20 area has served as a pivot of sorts since the July 2018 high.
As such, I’d expect the area to attract sellers if tested.
I’m going to stay neutral USDJPY until I see something more from buyers or sellers.
I haven’t written about AUDUSD since February 26th.
Mostly because the Australian dollar hasn’t done much since that time.
In fact, my sentiment toward the pair is unchanged.
Given the break and retest of new support you see below, I still believe there’s upside potential here.
However, buyers have their work cut out for them.
They’ve struggled to gain traction above descending channel resistance.
And in recent weeks, buyers haven’t managed to move prices off of channel support.
All in all, the downtrend is still having its way with AUDUSD.
But I wouldn’t be surprised to see another move to channel resistance near the 0.7180 resistance area over the coming weeks.
It will be interesting to see what buyers can muster if they do force such a retest.
I’m going to remain neutral AUDUSD for now, but I am respecting the potential for a move higher particularly if we see another retest of channel resistance.
I wrote about the 83.80 resistance area on CADJPY last Thursday.
At the time, buyers were testing the level and were even pushing prices above it on an intraday basis.
But as you may know by now, I don’t pay attention to intraday moves.
And it’s a good thing too because sellers managed to push CADJPY back below 83.80 resistance by the 5 pm EST close.
Go here to get access to the same New-York-close Forex charts I use.
On Friday, sellers picked up where they left off the day before.
We saw additional selling pressure around the 83.80 level which extends up toward the 84.00 handle.
Friday’s session even carved a bearish engulfing range despite a few decent bids just before the weekend.
The CADJPY remains vulnerable this week while below 83.80 on a daily closing basis.
And as I mentioned last week, the next key support comes in at 82.40 followed by the 80.55 area.
Alternatively, a daily close above 84.00 would expose 84.80.
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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