Trading Support and Resistance

Huzefa Hamid

Get our trading strategies with our monthly & weekly forecasts of currency pairs worth watching using support & resistance for the week of August 10, 2021.

This week we will 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 18 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 August 2021

For the month of August, we make no forecast as there are no clear trends in the Forex market showing very strong momentum.

For the month of July, we forecasted that the EUR/USD currency pair would fall in value, while the USD/JPY currency pair would rise in value. The final performance was negative and is shown below:

Monthly Forecast July 2021
Weekly Forecast 8th August 2021

The last 2 weeks, we made no weekly forecast, as there were no large counter-trend price movements in any important currency pairs or crosses.

We again make no forecast this week.

The Forex market saw moderate volatility last week. The seven Forex majors moved an average of 0.58%, with the largest percentage move coming from USDCHF, the only Forex major to move by more than 1% in value.

Volatility is likely to remain about the same over the coming week.

Last week, the US dollar showed strength against the euro and Swiss franc, which contributed to a positive US Dollar Index move. The Aussie dollar and New Zealand dollar, on the other hand, both notched up gains against the US dollar of 0.14% and 0.55% respectively.

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 and Resistance Levels

Let us see how trading reversals from last week’s levels could have worked out:

EUR/USD

We had expected 1.1875 and 1.1895 to act as resistance, as they had acted as resistance levels in early July. The H1 chart below shows how 1.1875 acted as a minor resistance, but it was 1.1895 that that acted as a level that turned the price around to a downtrend. The price has since fallen by 140 pips from the first resistance level, and 160 pips from the second resistance area. 1.1895 was tapped multiple times to give several opportunities to enter short trades in EUR/USD.

EUR/USD

GBP/USD

We had expected the level at 1.3934 might act as resistance, as it had acted previously as support previously. Note that “flipping” levels, i.e. support turning into resistance, and vice versa, can work out well. The H1 chart below shows how the price rejected over a period of several days.

GBP/USD

That 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.

Huzefa Hamid

I’m a trader and manage my own capital. I trade the major Forex pairs, some Futures contracts, and I rely entirely on Technical Analysis to place my trades. Today, I am also a Senior Analyst for DailyForex.com. I began trading the markets in the early 1990s, at the age of sixteen. I had a few hundred British pounds saved up (I grew up in England), with which I was able to open a small account with some help from my Dad. I started my trading journey by buying UK equities that I had read about in the business sections of newspapers. The 1990s were a bull market, so naturally, I made money. I was fortunate enough in my early twenties to have a friend that recommended a Technical Analysis course run by a British trader who emphasized raw chart analysis without indicators. Having this first-principles approach to charts influences how I trade to this day.

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