Hey everyone! Welcome to this week's forex forecast for the week ending November 20th, 2020. I'm TraderBart with A1 Trading, and this week I'll be looking at GBPJPY, AUDUSD, EURCAD & XAUUSD.
Looking at the overall trend in this market, price is currently travelling in a healthy ascending channel. Looking closely, price has formed an ascending triangle pattern just above the support of the channel. Price has failed twice to break through the resistance at 137.650; however, last week, we finally saw a successful break to the upside, and price has now closed off for the week at the retest of that same resistance level. I am now looking out for successful rejections to this level, acting as new support, and then I will be going long targeting the previous higher high at 142.000 and possibly the resistance of this channel at 146.000. These are obviously quite far away from the current price, however with positive Coronavirus vaccine news coming out (and expected to come out over the next couple of weeks), we could easily see price shoot straight up to these levels.
Looking at this market, we have got a downtrend formed; price is forming lower highs and lower lows. However, as you can see, it has been struggling to make clear lower lows. Price has been failing to break through the support level at 0.7020, and this has formed a much clearer descending triangle pattern instead. With this pattern, I usually expect a continued downwards move; however, we have seen a break to the upside. After the initial breakout, price has retested to the major 0.7220 level, which was seen multiple times as clear support or resistance. Price retested, treated this level as clear support, and is now bouncing off and making a continued upwards move. It is not too late to enter on this pair, ideally would be around 0.7230; we could still see this level being met as we open next week. Extended fundamental analysis will be heard in the YouTube video; click the pink button at the top of this article.
Price has been travelling in this descending channel for a while now, forming successive lower highs and lower lows. Price is now approaching this channel's resistance, so there is still some potential bullish positions that could be taken before the short of catching the next swing of the trade. This resistance also matches up nicely with the 78.6% Fib retracement level, and a short position at 1.560 after successful price action confirmations of a continued downwards movement would be an ideal entry. I am looking to target the area around the 0.0% Fib level, for a completed channel move. VIP members will be informed if I take this trade.
Last week I expected a bullish move on this pair, following the likely results of the elections being a Biden win. However, on Monday morning, we had absolutely fantastic news that the pharmaceutical company Pfizer announced positive results for a Coronavirus vaccine, which was "90% effective". This caused completely enormous strength in all currencies, causing price to drop back into this descending triangle pattern. Even Goldman Sachs said, "the vaccine is a more important development for the economy and markets than prospective policies of a Biden administration". I am looking to go short on this pair at around the 1898-1902 area once there are clear rejections to the trend line. There should be more upcoming (most likely to be positive) vaccine news, so I expect this pair to absolutely shoot down.
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