Hey everyone! Welcome to this week's forex forecast for the week ending March 5th, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at USDJPY, EURUSD, GBPJPY & XAUUSD.
Over the past couple of weeks, we have seen price shift trends from a downtrend to an uptrend, and price is now channelling to the upside, breaking highs from the previous channel. Zooming into price action from last week, we can see price break through the EQH at 106.2; this area is marked as retailer's resistance, where most traders would have gone short for the double top. As anticipated, price shot to the upside, taking out their trades, and I am now expecting price to bounce off the channel's top and head to the downside.
I have got mixed bias on EU at the moment because, looking at this chart from a buyer's POV, price is currently at the channel's bottom, and we are now looking for price action confirmations of a bullish reversal and looking to get in to continue the channel. On the other hand, a seller would point out the overall bearish flag chart pattern that has now gotten the third touch of the channel's top and is already at its bottom. Also, price recently broke the EQH at 1.215 - 1.218 from the double top formed, where retailers would have stopped out on their short positions. Sellers would've already been in this trade from 1.222 and are most likely looking to continue holding the trade to at least 1.195.
I have been looking at GJ for a while and have been pointing out this ascending channel since the initial Covid-19 crash back in March 2020. Price has now reached an enormous bull's target of 150.0 last week and has finally touched the channel's top. This EQH is a great level where retailers would now be looking to go short and ride the train back towards the channel's bottom. However, I believe price will continue to consolidate around this level for a while and possibly even reach new highs once there is enough liquidity for banks to manipulate the price to take out those trades. GJ will head down to around 144.0 at least, but it is more of a medium-term target.
Looking at Gold, we have got the long-term bullish flag pattern I am still waiting to complete, and I still believe it will in the long-run. Currently, price has just broken through an EQL at 1762 where (on the H4 timeframe) is much clearer for a double bottom. Retailers would have been going long at around 1760, and we saw the enormous bearish move last Friday because there was a lot of liquidity around its current price. Most traders had their stop losses here, and of course banks would take advantage and push price lower. Retailers are most likely switching bias now and targeting the channel's bottom however, I believe we will see Gold push back up to at least around 1800 in the couple of weeks or so, as long as price does not continue heading any lower.
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