Trading Support and Resistance - 12 August 2018

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:

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:

table1

Monthly Forecast August 2018

For the month of August, we forecasted that the best trades will be short EUR/USD and short GBP/USD. The performance so far is as follows:

Currency Pair

Forecast Direction

Interest Rate Differential

Performance to Date

EUR/USD

Short ↓

2.00% (2.00% - 0.00%)

+1.34%

GBP/USD

Short ↓

0.75% (0.75% - 0.00%)

+1.78%

 

Weekly Forecast 12th August 2018 

Last week, we made no forecasts, as there were no strong counter-trend movements.

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

This week has been dominated by relative strength in the Japanese Yen, Swiss Franc, and U.S. Dollar, and relative weakness in the New Zealand Dollar and other commodity currency. Sentiment is clearly “risk on” with a flow to safe-haven assets.

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

Previous Monthly Forecasts

You can view the results of our previous monthly forecasts here.

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:

Currency Pair

Key Support / Resistance Levels

AUD/USD

Support: 0.7260, 0.7230, 0.7207, 0.7163

Resistance: 0.7322, 0.7348, 0.7382, 0.7479

EUR/USD

Support: 1.1372, 1.1328, 1.1308, 1.1296

Resistance: 1.1447, 1.1496, 1.1580, 1.1630

GBP/USD

Support: 1.2616, 1.2552, 1.2429, 1.2388

Resistance: 1.2818, 1.2842, 1.2920, 1.2975

USD/JPY

Support: 110.55, 110.00, 109.07, 108.05

Resistance: 111.19, 111.86, 112.15, 112.57

AUD/JPY

Support: 80.42, 80.00, 79.35, 78.89

Resistance: 82.54, 82.81, 83.45, 84.54

EUR/JPY

Support: 125.60, 124.71, 123.75, 120.74

Resistance: 126.82, 128.49, 128.98, 130.05

USD/CAD

Support: 1.3120, 1.3053, 1.2996, 1.2826

Resistance: 1.3281, 1.3327, 1.3383, 1.3464

USD/CHF

Support: 0.9922, 0.9904, 0.9885, 0.9827

Resistance: 0.9978, 1.0010, 1.0111, 1.0150

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.