As it is Sunday, I’m taking some time analysing the potential setups on forex pairs for the upcoming week. Last week was mixed. On the one hand, we had some good setups showing up, but many traders were presumably still on holiday, which resulted in a less volatile and more random market. For the weekly forex outlook of this week, I’m looking at the following currency pairs:
Follow my published ideas on TradingView.
Last week, we’ve seen the reversal setup on EURAUD finally materialise. The bullish divergence (price made lower lows while RSI made higher lows) was another confirmation, but the rejection of the lower support level followed by the very bullish move up left little doubt.
On Wednesday, price already tested the resistance level (indicated by the black horizontal line) but initially rejected it. On Friday though, price broke finally through it and closed comfortably above.
There’s still plenty of upside for the pair and depending on what happens Monday, good entry possibilities could be on a retrace to the resistance-turned-support. The first take profit level would be at a resistance zone at around 1.50600 (for a R:R of about 1:1.6) but further profit levels are definitely possible, up to the longer term resistance area at 1.55100.
This is not something I consider to be a valid setup yet, but price approaches an interesting level. The last time price moved down to the 1.04400 level, bulls were ready to fiercely push the price back up, resulting in a nice pinbar. The last days have shown quite a sell-off though.
Two scenarios are possible: either we see another bull run once price touches the support area or the bears can break through the level and price moves further down. In any case I’ll be looking for price action patterns that validate either one of the directions, but for now I’ll have my alerts set and I’m in waiting mode.
This pair sparked my interest since it is nearing an important supply zone (marked in green) that you can see clearly on the weekly chart. On the daily, we can see the price making a small top, after which a sell-off and consolidation followed. Bulls pushed the price a bit higher, but we can see the divergence on the RSI.
I’ll be looking for signs that the bulls have nothing left to push the price higher and I’m sure there are a lot of sellers ready in that resistance zone. This needs a couple more days to develop, but it looks like something interesting in the making.
The last pair for this week is USDCAD. When the price moved into the bottom support zone last Friday, bulls were ready to push the price back up immediately. It’s an area that is tested a lot of times, so lots of people are bound to be watching this area. After the big sell-off from the latest peak in the middle of the chart, you can see price being indecisive for a while and trading in a consolidation area between the top and bottom zones, making slightly higher lows and higher highs. This is an indication that price might be ready to move higher and I’ll be looking to enter long if I see decisive price action confirmation of this move.
Good luck trading!
What setups are you looking at? Share your thoughts in the comments!
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