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:

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:

 Global currencies

Monthly Forecast November 2019

For the month of November, we forecasted that the best trade would be long GBP/USD following a daily close higher than 1.3081. There has not been a daily close above that level yet.

Weekly Forecast 17th November 2019  

Last week, we made no weekly forecast as there were no very strong countertrend movements. This week we again make no forecast.

The Forex market has become slightly less active, with only 11% of the important currency pairs and crosses moving by more than 1% in value over the past week. Volatility is likely to be higher over the next week. There are no strong trends in the Forex market as present.

Last week was dominated by relative strength in the New Zealand Dollar, and relative weakness in the Australian Dollar.

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

Advertisement
Great trade opportunities are waiting - don't wait to profit from this pair!
TRADE NOW

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

Support and Resistance Levels

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

AUD/USD

We had expected the level at 0.6769 might act as support, as it had acted previously as both support and resistance. Note how these “flipping” levels can work very well. The H1 chart below shows how during last Thursday’s New York session, the price bounced strongly off that level, forming a bullish pin candlestick marked by the up arrow in the price chart below, which immediately broke to the upside. This trade has given a very good maximum reward to risk ratio of more than 4 to 1 so far.

 AUDUSD

EUR/JPY

We had expected the level at 120.64 might act as resistance, as it had acted previously as both support and resistance. Note how these “flipping” levels can work very well. The H1 chart below shows how towards the end of last Tuesday’s Asian session, the price bounced strongly off that level, forming a bearish engulfing candlestick marked by the down arrow in the price chart below, which immediately broke to the downside. This trade has given a very good maximum reward to risk ratio of more than 6 to 1 so far.

EURJPY

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.

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