Hey everyone! Welcome to this week's forex forecast for the week ending December 18th, 2020. I'm TraderBart with A1 Trading, and this week I'll be looking at GBPUSD, USDJPY, GBPJPY & XAUUSD.
Price has been travelling in this ascending channel since March forming higher highs and higher lows. Over the past couple weeks, I've been saying we are now forming the next swing in the market, making our way to the channel's top. However, we saw price form the rising wedge, which price has now broken out off and made a move to the downside, touching the channel's bottom. Buyers in this market would look to go long at around 1.31 as long as there isn't a daily candle close below the channel and target the channel's top at around 1.40. Sellers in this market would look to go short at around 1.327 as long as price can hold and reject this intraday level once more. They could look for targets outside of the channel if price confirms a new trend at around 1.29 and possibly 1.20. Click here for my fundamental outlook on this pair.
Price has been moving in a strong bearish trend, staying below the descending trend line, we can see many touch, rejection and bounce off this trend line. Currently, we're seeing price consolidate between 104.7 and 103.7, and the direction market could be heading next is unknown, until we see a clear breakout of these levels. If we see the overall trend continue, and price breaks below the range, then sellers could look to enter on the retest of the previous support level and target 103.00 and a previous low at 101.50. If we see price break above this range, then buyers could look to enter on the retest of the previous resistance level and target the 105.40 level and previous highs at 107.00.
Similarly to GU, price is also travelling in an ascending channel forming successive higher highs and higher lows. We can see the ascending triangle pattern, which was formed with resistance at 137.70, price broke out, formed a new resistance at 140.00 and now treats the previous resistance as new support. Price dropped back down to the channel's bottom, near enough at the same support level. Buyers in this market would look to go long at around 137.00, and look for targets at around 140.00 and then 147.00. Sellers in this market would look to go short at around 137.70 as long as price can hold and reject the previous resistance and continue treating it as resistance, targetting 133.00 and 126.00. We may also see a completely new trend form if we see the Daily candle close below the channel's bottom.
I've been pointing out this bullish flag pattern that price has formed on this pair. We saw price touch, reject and bounce off the channel's bottom and price is now stuck consolidating at the previous support level of the second descending triangle pattern in the channel. Buyers would go long at around 1850, or 1885 once there are clear price action confirmations of a continued bullish move, and look for targets at around 1924 and 2050. Sellers would go short at around 1850, or 1820 or there are clear price action confirmations of a continued bearish move, and look for targets at around 1785 and 1730.
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