In this weekly Forex forecast, I’m going to show you exactly how I’m trading EURUSD, GBPUSD, USDJPY, EURJPY, and XAUUSD through February 7, 2020.
Watch the video below, and be sure to scroll down for more commentary and annotated charts.
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EURUSD Forecast
The EURUSD broke down on January 3rd.
We waited several weeks for a breakout, and I discussed how a move lower could target 1.0990 on January 22nd and again on January 25th.
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I also discussed the 1.0990 support level last week.
And in the EURUSD members-only video, I explained how shorts needed to be careful while the euro was coming off of the 1.0990 area.
Although we were waiting for the euro to “reset” itself for another possible short opportunity, buyers had other plans.
Friday’s session appears to have put the EURUSD back above the 1.1075 key horizontal level and the 2019 ascending channel.
That means 1.1075 to 1.1100 is conditional support.
It’s conditional because it depends on where the euro opens on Monday. See the video above for the details.
An open at or above Friday’s close would signal strength, while an open below 1.1075 could suggest Friday’s rally was mere profit-taking ahead of the weekend.
If we do see the EURUSD start to base above 1.1075, I may look to buy the pair for a move to the 1.1170/80 resistance area.
But it all hinges on Monday’s open, at least for me it does.
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GBPUSD Forecast
The GBPUSD was even more impressive than its euro counterpart last week.
Thursday’s session carved a bullish engulfing candle following the BOE decision and statement.
Notice too that the pound never did close below the 1.2980 support region.
In fact, the GBPUSD never even closed below the November 2019 trend line that I’ve discussed several times on this site.
As of now, the pair looks relatively constructive.
If buyers can keep the price above new support at 1.3170 on a daily closing basis, there isn’t much between Friday’s close and the 1.3340 level.
But just like the EURUSD, I’ll want to see where the GBPUSD opens on Monday.
That will be a key factor in determining whether last week’s rally has legs or if this is a bull trap like we saw at the end of December.
USDJPY Forecast
USDJPY was my main focus last week.
I discussed the potential for a move lower from the risk-sensitive pair on January 23rd.
Here’s what I wrote:
But given the short-term ascending channel in the chart below, a move lower does seem likely.
We got that break just two days later with Monday’s gap down.
Then on January 28th, I discussed how the January 24th close at 109.27 could serve as resistance.
The USDJPY carved a session high of 109.26 a few hours later.
What followed was a 90+ pip selloff into the weekend.
I got short here at 109.22 during Wednesday’s retest of 109.20/30 as new resistance, and I’m still short as of this writing.
I might take some off at channel support near 108.00, but remember that a break there would expose 106.80.
As of now, I have no reason to think the USDJPY selloff is over, especially given the recent flight to safe havens and USD weakness.
A move to 106.80 or even 105.00 over the coming weeks shouldn’t be ruled out.
Only a daily close back above 109.20 would reverse my bearish bias.
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EURJPY Forecast
The EURJPY is another risk-sensitive pair that has played out beautifully.
I first discussed the possibility of a break lower on January 23rd.
The way the pair was starting to lean on ascending channel support hinted at an imminent breakdown.
I managed to get short at 121.63 based on the repeated retests of channel support, as I mentioned in today’s video.
Key support for the week ahead comes in at 119.80, but we could also see a bid develop around 119.20.
The 120.40 area is minor resistance for the week ahead.
But keep in mind that if you’re looking to take advantage of yen strength, the EURJPY may not be the best vehicle given recent USD weakness.
XAUUSD Forecast
The XAUUSD (gold) uptrend that began in 2018 continues to look healthy.
We caught the breakout that occurred on December 23rd with a final target of 1550.
I also wrote about XAUUSD two weeks ago.
In that forecast, I mentioned how the uptrend was still intact, and that a break above recent consolidation could target 1580.
Based on Friday’s close, gold may be on its way toward 1610.
But just like some of the other pairs in today’s forecast, the break higher will be contingent on Monday’s open.
If XAUUSD can stay above that 1580/90 region, we could see a move to 1610.
Alternatively, a gap down on Monday could signal weakness, but it isn’t something I would short given the strength of this latest rally.
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Great Work! Justin.
thanks Mentor Justin, what an insightful forecast!
You’re very welcome.
Thanks you very much for the perfect forecast.
I would like to know your view on GBP/JPY.
You’re welcome. I’m no longer interested in GBPJPY. I’m playing yen strength through other means given the pound’s strength of late.
Thanks once more Mr Justin for the update and analysis of this pairs
You’re very welcome.
Thanks for the excellent analysis sir justin.
My pleasure, Ali!
Thank you very much for this week analysis please.
You’re welcome, Samuel. Cheers.
Thanks for your analysis sir, I love it
Cheers. Glad to hear that!
Thankyou Justin for the update
Anytime, Florence. Have a fantastic week.
Thanks Justin. I still see EURJPY come down to 118.40 horizontal handle in weeks to come but a retest of trendline support turned resistance is very near.
Thank you so much Justin for time to teach us and lead us to this great industrey.
Hy justin i hope you will be fine. I read your every post you do for biggners and for all, you post your chart setups free of cost. But in recent posts you are hidding your charts , this is very dissapointing kindly upload your charts again so that every one can see them.This should be done for the benefits to humanity.If you are not so greedy for the money , and i know you are not.
The chart is in the post above. Not sure what you’re referring to. Nothing has changed.
Thanks Justin for the analys. I always watch your weekly analys
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Wednesday, January 20, 2021