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Message: <blockquote data-quote="blcdilruk" data-source="post: 22876493" data-attributes="member: 213939">Weekly Forex Forecast (February 19 – 23, 2018)<img src="https://cdn.dailypriceaction.com/wp-content/uploads/2018/02/eurusd-key-levels.png" alt="" class="fr-fic fr-dii fr-draggable " style="" />Friday’s bearish candlestick could spell trouble for EURUSD bulls this week.Following a 350 pip rally that punched through 1.2325 on Tuesday, the single currency hit a wall of sellers at 1.2520/40. It’s an area that has capped EURUSD advances since January 25.A rotation higher this week into 1.2470/5 could present an opportunity to get short. However, keep in mind that the broader uptrend is intact, so any selling up here is against the bullish momentum.If you are interested in shorting the pair, one way to combat the bullish momentum is to start small. So instead of entering with your full position size, try going in with half or one-fourth of your standard size and then scale in as the market moves in your favor.Key support for the week comes in at 1.2325. A daily close (using New York close charts) below 1.2325 would expose 1.2160 followed by 1.2080.I’m still keeping an eye on the trend line that extends from the April 2017 low. Levels such as this tend to serve as magnets, especially when markets become overextended as the EURUSD has in recent weeks.That trend line could become a near-term target for sellers and perhaps the starting point for the next leg higher should we get a bullish signal following a rotation lower.<img src="https://cdn.dailypriceaction.com/wp-content/uploads/2018/02/gbpusd-false-breaks.png" alt="" class="fr-fic fr-dii fr-draggable " style="" />The GBPUSD produced two false breaks last week. The first occurred at 1.3850 with the February 9 and 12 sessions closing below the level only to close back above it on the 13th.Then came Thursday’s close above 1.4070, a level I mentioned in the February 4 commentary and again on the 8th. Friday’s 1.4027 close put the pair back below the level to end the week.It’s rare to see two false breaks in one week, but given the recent increase in volatility, it isn’t surprising.Now that the pound is back below the 1.4070 handle, I would expect to see an influx of selling pressure on a retest of the area this week.Another indication of near-term weakness is the descending channel that appears to be forming. If the 1.4070 area holds as new resistance, we could see a move back toward 1.3850 with a break there exposing the 1.3600 support area.Just like the Euro, I’m still bullish on the GBPUSD. The broader uptrend is intact, and this channel (if it becomes one) could signal a buying opportunity in the coming weeks.However, recent price action suggests a cooling off period for both the EURUSD and GBPUSD which could expose lower levels before the next leg higher begins.<img src="https://cdn.dailypriceaction.com/wp-content/uploads/2018/02/usdjpy-new-resistance.png" alt="" class="fr-fic fr-dii fr-draggable " style="" />The USDJPY lost 260 pips last week. Not only did the pair clear the 2017 low at 107.30, but it also took out trend line support that extends from the September 2012 low. I mentioned this possibility in the February 13 commentary.That was an incredibly significant breakdown. A risk-sensitive pair like the USDJPY breaking below a five and a half year support level signals the end of an era in my opinion.It’s no coincidence that pairs like the EURJPY and GBPJPY have also broken below key handles in recent weeks.As long as the USDJPY remains below the 107.30/80 resistance area on a daily closing basis, I’ll stay bearish here. The first key support sellers have to deal with comes in at 105.50, which is one of the levels I pointed out on Tuesday and also triggered Friday’s bounce.A daily close below 105.50 would expose 103.70 followed by 101.75. As for the longer-term outlook, I wouldn’t be surprised to see the pair trading at 100.00 at some point over the coming weeks and months.<img src="https://cdn.dailypriceaction.com/wp-content/uploads/2018/02/eurjpy-rising-wedge.png" alt="" class="fr-fic fr-dii fr-draggable " style="" />On January 23 I discussed how I believed the EURJPY to be topping out near 136.60. Eight trading days later, the pair carved a high of 137.50, a level that’s nearly 600 pips above Friday’s close.Then on February 8, the Euro cross fell below rising wedge support at 134.00. Less than 24 hours after that commentary we got our retest of the 134.00 handle as new resistance.If that wasn’t enough to convince you that the pair is technically sound, Wednesday’s session bounced from the 131.40 area. It’s arguably the most well-defined level within view and one that I’ve had on my chart for several months.The bid that developed just above 131.40 was so strong that it turned the EURJPY positive during Wednesday’s session even after a 180 pip intraday plunge.However, despite the late-session push, buyers have so far failed to extend the price above Wednesday’s high at 133.38.Last Thursday I pointed out how weak the USDJPY has been of late. That weakness suggests yen strength, which has spilled over into the yen crosses such as the EURJPY.As long as the USDJPY remains below the 108.00 area (see chart above), the EURJPY and other yen crosses will continue to struggle.If the EURJPY rotates higher this week, I would expect to see an influx of selling pressure near 134.50. Alternatively, a daily close (New York 5 pm EST) below 131.40 would expose 128.30 followed by 125.70.<img src="https://cdn.dailypriceaction.com/wp-content/uploads/2018/02/eurnzd-ascending-channel-1.png" alt="" class="fr-fic fr-dii fr-draggable " style="" />I first mentioned a possible change in direction in the EURNZD on February 7. The swing low in January was the first lower low in twelve months which was a sign that buyers were tiring.Following the January 11 swing low, the pair began forming an ascending channel. This gave us a pattern we could use to initiate a short position, but not until sellers had cleared channel support.That break came just before the U.S. session on Friday. The 4-hour close at 1.6864 was my trigger to get short. I even told Daily Price Action members of my intention before Friday’s breakdown.As shown in the February 7 commentary, the final target here is the September 2017 low at 1.6140. I came to this conclusion based on the 960 pip range between December 1 and January 11. A 960 pip move lower from the February 5 high puts the pair at 1.6140.For those who missed Friday’s entry, a rotation higher this week into new resistance at 1.6835 could offer a selling opportunity. Key support comes in at 1.6630 followed by 1.6360 and 1.6140.Source <a href="https://dailypriceaction.com" target="_blank">https://dailypriceaction.com</a></blockquote>

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