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Weekly Forex Price Action Outlook | Apr 27-May 2
GBPUSD – Knockin on Major Resistance, But…
Stuck in an 80 pip range for the last 7 days, the GBPUSD has formed two pin bars off the key resistance at 1.6840 that we’ve been talking about in the members commentary lately. Hanging at the upper levels suggest bulls are crimping the bears out of the market, and will attempt to push for a breakout, especially since the last pin bar was smaller than the first.
Bears wanting to short should wait for a small corrective push up to 1.6840, while bears will need to wait till a small pullback towards 1.6670/6700, or a breakout pullback above 1.6840 before getting long. Keep in mind we have the Nov. 09′ resistance at 1.6875 further above, but nothing till the ‘big figure’ at 1.7000.
Gold – False Break + Engulfing Bar Signal At Support
In our April 24th commentary, we shared a live trade for +750 pips, and talked about the false break + engulfing bar signal at the key 1277 support. Note how this was a classic false break at the support level, combined with a strong-bullish close. This told us the false break + engulfing bar signal was worth considering for a buy setup.
For this week, if the bullish price action continues, I could see the PM continue up to the next resistance area between 1320 and 1330. A daily close below the lows last week puts 1249 and 1233 in focus.
Dow Jones – Falls Lower After Pin Bar + False Break At Key Resistance
As discussed in our members commentary on April 24th, the Dow Jones made a tiny false break at the key resistance we discussed in our weekly market commentary. We can see on late Thursday and Friday as well, the US index fell significantly lower from this resistance following the pin bar + false break.
This to us was obvious and as predicted because of where it formed, being how firm this area/level held in the past. If the bearish momentum continues next week, I could see a further retest of the key support at 16K. Watch the current 4hr pin bar for a corrective or impulsive push, for if its the former, then this would suggest bears are still in control short term.
Check out our primer article on Trading the False Break Part 1
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