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The EURUSD broke a short-term resistance level on Friday.
It isn’t what I would consider a significant breakout, though.
There is also a ton of overhead resistance due to the choppy price action since late last year.
But if Friday’s session did breakout, I’d expect the pair to encounter buying pressure near 1.1210.
That area needs to hold this week for the EURUSD to appreciate.
If it fails, we could see the single currency slide right back to 1.1110.
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As for key resistance, I would keep an eye on the 1.1320 area as well as 1.1420.
I’m not too interested in the EURUSD, though.
The price action so far this year has been less than ideal, and I think there are better opportunities out there.
GBPUSD reacted to 1.3110 perfectly last week.
On Monday I wrote how a daily close back below this area would be bearish.
Monday’s session closed below the level and Thursday retested it as new resistance.
The GBPUSD caught a bid at 1.2970, but that slide lower still gave sellers more than 100 pips to work with.
That range between 1.2970 and 1.3110 is the one to keep an eye on moving forward.
A close below 1.2970 would expose the 1.2900 region and perhaps 1.2800.
Alternatively, a close above it could rechallenge the year-to-date high.
That said, just like the EURUSD, the price action on GBPUSD is less than favorable, so I’ll stand aside for now.
NZDUSD tested channel resistance again on Friday.
I mentioned this descending channel on May 2nd when the pair was on its way to retest horizontal support at 0.6590.
That level actually broke down last Wednesday.
You can even see where the daily chart closed below 0.6590.
However, Friday’s session closed back above 0.6590 which hints at the possibility of further strength this week.
Notice too that the pair carved a 4-hour bullish pin bar on the 8th.
That’s a pretty clear indication that buyers are camped out between 0.6530 and 0.6590.
But NZDUSD bulls still have to deal with channel resistance just above the 0.6600 handle.
Until that area breaks, the NZDUSD is vulnerable.
That said, if buyers can clear channel resistance over the next few sessions, there isn’t much standing between today’s price and the 0.6720 region.
That’s more than 100 pips from the current price.
Like much of the market, NZDUSD is still a waiting game. However, it is one worth keeping an eye on if buyers can come through.
Similar to some other yen crosses, the EURJPY looks relatively weak.
The pair managed to bounce from the January 3rd flash crash close at 122.60. It even carved a bullish pin bar on Thursday.
However, EURJPY failed to close the gap from earlier this month.
Buyers also failed to hold prices above what appears to be a trend line from that January 3rd close.
That open gap and former trend line support offer a confluence of resistance at 124.40.
I will be interested in a short but only if we get a retest of that 124.30/40 area as new resistance.
Key support for the week ahead comes in at 122.50/60 followed by the flash crash low way down near 119.00.
The GBPJPY broke a significant support level last week.
I first wrote about this wedge on the 3rd. That same session broke through wedge resistance.
However, it was a Friday break which tends to be a bit less reliable.
But more importantly, there was no retest of the level as new support.
In other words, the setup never materialized. And it’s a good thing, too.
As is often the case, that false break of resistance triggered an aggressive selloff last week.
The GBPJPY even closed below wedge support at 143.80.
I still think a retest of this 143.80 region as new resistance is probable. Even the 10 and 20 daily EMAs are still 140 pips above Friday’s close.
We’ll see if GBPJPY buyers can force an 80 pip bounce this week back to 143.80.
If they do, I will be interested in a short for a move to 141.15 and perhaps 139.00.
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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