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What is the outlook for forex in 2020?

2019 has seen the greenback triumphant against most other major currencies. While GBP/USD could be at a turning point, there are risks of further downside for EUR/USD, AUD/USD and USD/CAD.


EUR/USD has spent the past two years steadily declining. ‘Sell the rallies’ has been the phrase, and with the price having bounced from the September low and returned to the 50-week simple moving average (SMA) of $1.119, some will be expecting further declines.

A reversal below $1.11 would provide that indication, and would open the way to $1.09, possibly the last stop below a fall to the 2016 lows at $1.0532. A close above $1.12 would be a signal for a potential breakout, targeting $1.14 and then $1.1554.


It has been a five-year downtrend for GBP/USD, but we could be at an interesting turning point.

The second week of December 2019 saw the price close above the 200-week SMA ($1.3039), but if the price closes back below this then more downside may result. A possible target would be $1.20, the key low of 2016 and 2019. A rally back above $1.35 would reinforce the perception of a trendline break.


The key characteristic of EUR/GBP has been the three-year resistance around £0.93. Rallies to this level since early 2016 have run out of steam.

The late-2019 decline carried the price through trendline support from the November 2015 low, but once again a dip to £0.83 has found support. Further gains target £0.90 and then £0.93. A weekly close below £0.83 would mark a significant shift, and might signal the start of a bigger pullback, although we will need to see the creation of lower highs and lower lows to provide confirmation.


Lower highs have been in fashion for USD/JPY since the first half (H1) of 2015. While the pair has bounced from the low of the year at ¥105.00, a key level of support since 2018, the rally could be running out of steam.

A long-term descending triangle is in place, which would suggest any fresh decline will challenge ¥105.00 again and then potentially open the way to ¥100.00. A rally above ¥110.00 is needed to break higher, to target ¥112.40 and then ¥113.60.


AUD/USD has declined in 2018 and 2019. Gains this year have been capped by the 50-week SMA (currently $0.6952), but the fall has slowed in pace as it approaches support at $0.668.

A move below this brings $0.6248 and then $0.6008, lows not seen since 2009, into play. A longer-term bullish view requires a move back above the 50-week SMA and the creation of a higher low.


Having rallied steadily since 2017 H2, USD/CAD has lost momentum over the past 12 months.

Lower highs have been in place since December last year, and while the pair has held above C$1.30, another test of this level seems likely. Below this, C$1.28 and C$1.26 come into view, while a more bullish view on this time frame requires a move above C$1.334, a zone of resistance that has held since July, along with trendline resistance from the December 2018 high.

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