Trading Support and Resistance

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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:

Monthly Forecast March 2020

For the month of March, we forecasted that the best trade would be short AUD/JPY. The performance to date has been strongly profitable, as follows:

March Performance to Date

Weekly Forecast 15th March 2020

Last week, we made no weekly forecast. Although there have been very large counter-trend price movements, we again make no forecast this week, as we believe the nature of the fear behind the current high market volatility is unprecedented in living memory, so near-term price movement is more unpredictable than it was in previous high-volatility regimes.

The Forex market is showing much, much greater price activity compared to last week, with 85% of the important currency pairs and crosses moving by more than 1% in value over the past week. This high level has not been seen for more than 11 years. Volatility is likely to remain very high over the coming weeks as the world grapples with the coronavirus pandemic.

Last week was dominated by relative strength in the U.S. Dollar, and relative weakness in the British Pound.

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 can be watched on the more popular currency pairs this week. However, they should be used with great caution due to the very high level of fear and volatility in markets right now. Levels are likely to be most reliable at the end of very large directional movements, and mostly will be unlikely to hold.

Key Support and Resistance Levels

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