Trading Support and Resistance
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 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 July 2019
For the month of July, we forecasted that the best trades would be short USD/CAD and short USD/JPY. The forecast’s performance to date is shown below:
Weekly Forecast 7th July 2019
Last week, we forecasted that the NZD/JPY currency cross would decline in value. It did, by 0.85%, giving a winning trade.
Only 30% of the important currency pairs and crosses moved by more than 1% in value over the past week. Volatility is likely to be at a similar or lower level over the coming week.
Last week was dominated by relative strength in the U.S. Dollar, and relative weakness in the New Zealand Dollar.
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:
That’s all for this week. 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.