AUDJPY was the king of last week’s forecast with a sharp drop within less than about 50 hours. USDJPY went ahead with its choppiness and GBPCHF failed to secure a close above the wedge resistance. It broke falsely and fell back within the range and ended the week with little volatility. The attention for this week will be well placed on a few selected GBP pairs and Gold.
The charts in focus for this week are GBPUSD, GBPJPY, GBPCHF and XAUUSD.
The price of this pair is currently below a multi month trendline from the daily timeframe and the bearish momentum doesn’t look like it is out of steam yet. This trendline spans a period of over five months with several touches and wicks. It doesn’t make it seem that clear. The recent week also ended with price slightly testing the low of the recent month which is March. If this slight retest holds true, I will be in with the sellers.
GBPJPY currently sits comfortably on a support level. This level is 143.80 and it has held as support for several times and it acted as resistance once; in December 2018. The normal market theory propounds that the more a level is tested, it becomes strong. If that theory holds then prices may bounce up from this level. However, several tests of a level may over-expose and weaken it. For this reason, I will be on the lookout for a break of this level.
An upside break to the wedge I pointed out on this pair last week didn’t work out as price met a fierce resistance at 1.3273. it managed to push GBPCHF down strongly on Tuesday and Wednesday, but it didn’t follow through for the rest of the week. On the 4 hour timeframe, there seem to be a retest of the wedge support as resistance. If it holds true as a legit retest, this pair is headed down.
Note: Correlation logic will play out well on the GBP pairs. This is where they are all supposed to move up or down together. If one is moving up and another is moving down, patience will be needed to play the GBP forecasts out.
I’m jumping the gun on Gold. From the daily timeframe it seems to be carving out one favorable pattern which is wedge-like. It has been in a downtrend since late January of this year as it has formed lower highs and lower lows. Wedge resistance has connected 3 lower highs and the 4th lower high is up next; that is, if price keeps on pushing up. The lower lows also have 2 connecting points so the support of the wedge is not well established.
The action will rise on this commodity when price is able shoot to the area of resistance. Until then, gold is trading within a diagonal range.
I wish you a profitable week!