Trading Support and Resistance - 3 July 2016

This week we’ll begin with our monthly and weekly forecasts of the currency pairs worth watching. The first part of our forecast is based upon our research of the past 11 years of Forex prices, which show that the following methodologies have all produced profitable results:

Let’s take a look at the relevant data of currency price changes and interest rates to date, which we compiled using a trade-weighted index of the major global currencies:

Chart 1

Monthly Forecast July 2016

This month we forecast that the best movements will be short GBP/USD and USD/JPY.

Weekly Forecast 3rd July 2016

Last week, we made no forecast.

This week, we again make no forecast, as there were no strong counter-trend movements.

This week has been dominated by further weakness in the British Pound, and strength in the Euro. There is a “safety” sentiment in the market and the Brexit vote had a great impact.

Volatility was much less than it was last week, with one approximately 40% of the major and minor currency pairs changing in value by more than 1%. Volatility is likely to be greater over this coming week, which will be dominated by the Federal Reserve’s stance on the U.S. Dollar.

You can trade our forecasts in a real or demo Forex brokerage account.

Key Support/Resistance Levels for Popular Pairs

At the FX Academy, we teach that trades should be entered and exited at or very close to key support and resistance levels. There are certain key support and resistance levels that should be watched on the more popular currency pairs this week, which might result in either reversals or breakouts:

Chart 2

You can trade our forecasts in a real or demo Forex brokerage account to test the strategies and strengthen your self-confidence before investing real funds.

Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.