Hey everyone! Welcome to this week's forex forecast for the week ending May 14th, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at EURUSD, GBPUSD, EURAUD & XAUUSD.
As explained in previous EU analysis, price did retrace the move it made two weeks ago, used the channel's top as new support, and is now breaking out to the upside. Price has just about broken through recent highs at 1.215. During the weekend, European Commission President Ursula von der Leyen announced that the EU had struck a deal with BioNTech/Pfizer for up to 1.8 billion extra doses of their coronavirus vaccine for 2021-23. The Union aims to have 70% of its adult population covered by July. We could easily see price complete the bullish flag chart pattern and make a move to the upside.
Price has closed for the week just under the 1.40 level where we have seen has been acting as resistance for a while now. Once we see a clear break and retest and then continued rejection to this level, we could easily see price continue the long-term channel and head towards making the next high in this market. UK producers face significant barriers to EU trade ever since Brexit, with tensions in the fishing sector escalating. The pound may take note of the discouraging headlines at the weekly opening.
We've got an ascending triangle pattern form in this market, with resistance just under 1.57. Price closed off for the week at the trend line, if we see continued rejection to this trend line, it's possible we will see this chart pattern complete and price breaks out to the upside.
As I have mentioned, price did in fact break above the bearish OB, and therefore this is now a breaker block, where I will be looking to go long on this pair. I'm waiting for price to retrace into the zone, then I'll look out for price action confirmations of rejections to this zone and then look for price to go towards the liquidity void that has been visible since February.
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