Technical Analysis Weekly Forex Forecast Trading Support and Resistance - 18 February 2018 Trading Support and Resistance - 18 February 2018 Sunday, 18 February 2018 12:26 Share 0 Tweet 0 Pin it 0 +1 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 16 years of Forex prices, which show that the following methodologies have all produced profitable results: · Trading the two currencies that are trending the most strongly over the past 3 months. · Assuming that trends are usually ready to reverse after 12 months. · Trading against very strong counter-trend movements by currency pairs made during the previous week. · Buying currencies with high interest rates and selling currencies with low interest rates. 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: Monthly Forecast February 2018 For the month of February, we forecasted that the best trades would be long EUR/USD and GBP/USD. The performance to date is as follows: Weekly Forecast 18th February 2018 Last week, we forecasted that the CHF/JPY currency cross was likely to rise in value. However, it fell in value, by 1.05%. This week, we make no forecast, as there have been no strong counter-trend moves. This week has been dominated by relative strength in the Japanese Yen, and relative weakness in the U.S. Dollar. Volatility was a little lower than it was last week, with less than half of the major or minor currency pairs changing in value by more than 1%. Volatility is likely to be even lower still next week. You can trade our forecasts in a real or demo Forex brokerage account. Key Support/Resistance Levels for Popular Pairs 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: Let’s see how trading one of these key pairs last week off key support and resistance levels could have worked out: EUR/JPY We had expected the level at 131.87 might act as support, as it had acted previously as both support and resistance. Note how these “flipping” levels can work well. The H1 chart below shows the how the price hit this level during the early part of the New York session last Wednesday, which is typically a good time of day to enter Forex trades. A possible entry was signaled by the large bullish inside candle which formed immediately after the price level (which also happened to see a temporary break below a round number) was hit, marked by the up arrow within the chart below. This long trade has so far given a maximum reward to risk ratio of only about 1.2 to 1, if the stop had been placed just below the swing low at the entry candlestick. 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. Currency Pairs EUR/JPY Adam Lemon Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment. Learn more from Adam in his free lessons at FX Academy.