Trading Support and Resistance - 8 November 2015

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By: DailyForex.com

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:

Table 1

Monthly Forecast November 2015

This month we forecast that the most probable movements are short AUD/JPY and AUD/NZD. This forecast has performed negatively so far, as shown below:

table2

Weekly Forecast 8th November 2015 

We made no forecast last week.

This week, we forecast that the AUD/NZD pair will fall in value.

This week saw strength in the USD, and the greatest relative weaknesses were in the NZD, CAD, JPY and EUR, in that order.

Volatility was higher than the previous week. Approximately half of the major and minor currency pairs changed in value by more than 1%. Volatility is likely to be lower this this week as there are central bank events scheduled only for the NZD.

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:

Table 12

Let’s see how trading one of these key pairs last week off key support and resistance levels could have worked out:

USD/JPY

We had expected the zone from 120.28 to 120.00 might act as support, as it had acted previously as both support and resistance. Note how these “flipping” levels can work really well. The H4 chart below shows how the price fell to 120.28 early during Monday’s Asian session, rejecting it and forming two inside candles marked at the upwards arrow in the hourly chart below. It would have been a very nicely profitable trade with a fantastic reward to risk profile, and could be running now at a profit of approximately 280 pips.

USDJPY

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 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.
Learn more from Adam in his free lessons at FX Academy