Trading Support and Resistance

Adam Lemon

Get our trading strategies with our monthly & weekly forecasts of currency pairs worth watching using support & resistance for the week of November 9 2020.

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 us 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:

Currency Price Changes and Interest Rates

Monthly Forecast November 2020

This month, we forecast that the EUR/USD currency pair will be likely to fall in value. Last month, we forecasted that the USD/JPY currency pair was likely to fall in value. Its final performance was follows:

USD/JPY

Weekly Forecast 8th November 2020

Last week, we made no weekly forecast.

This week, we again make no weekly forecast, as there were no very strong counter-trend price movements in the Forex market last week.

The Forex market showed a considerably higher level of volatility compared to the previous week, with 52% of the important currency pairs and crosses moving by more than 1% in value last week. Volatility is likely to remain high over the coming week.

Last week was dominated by relative strength in the Australian and Canadian Dollars, and relative weakness in the U.S. 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 can be watched on the more popular currency pairs this week.

key support/resistance levels
Let us see how trading reversals from two of last week’s key levels would have worked out:

EUR/USD

We had expected the level at 1.1767 might act as resistance, as it had acted previously as both support and resistance. Note how these “flipping” levels can work well. The H1 chart below shows how the price rejected this level with a large bearish outside candlestick at the start of last Wednesday’s Asian session, as initial results of the U.S. presidential election suggested that President Trump had probably won re-election, before later results in favor of Biden turned the price decisively bullish. This trade was mildly profitable despite subsequent bullish price action, achieving a maximum positive reward to risk ratio of about 1 to 1 based upon the size of the entry candlestick.EUR/USD

USD/JPY

We had expected the level at 105.20 might act as resistance, as it had acted previously as both support and resistance. Note how these “flipping” levels can work well. The H1 chart below shows how the price rejected this level at the start of last Wednesday’s Asian session with a bearish inside candlestick, as initial results of the U.S. presidential election suggested that President Trump had probably won re-election. The price has continued to fall strongly making this trade nicely profitable, achieving a maximum positive reward to risk ratio so far of more than 4 to 1 based upon the size of the entry candlestick structure.USD/JPYThat is 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

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

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