Get our trading strategies with our monthly & weekly forecast of currency pairs worth watching using support & resistance for the week of October 18, 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 20 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 weekly counter-trend movements by currency pairs made during the previous week.
Carry Trade: Buying currencies with high interest rates and selling currencies with low interest rates.
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:
Monthly Forecast October 2021
For the month of October, we forecasted that the EUR/USD currency pair would fall in value. The result so far is shown below:
Interest Rate Differential
Performance to Date
+0.25% (0.25% - 0.00%)
Weekly Forecast 17th October 2021
Last week, we made no weekly forecast, as there were no unusually strong counter-trend movements last week. We again make no weekly forecast this week.
The Forex market saw an increased level of volatility last week, with 48% of all the important currency pairs or crosses moving by more than 1% in value. Volatility is likely to remain at a similar level or to decrease over the coming week.
Last week was dominated by relative strength in the Australian and Canadian dollars, and relative weakness in the Japanese yen.
You can trade our forecasts in a real or demo Forex brokerage account.
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
Support: 0.7393, 0.7366, 0.7328, 0.7267
Resistance: 0.7485, 0.7505, 0.7524, 0.7537
Support: 1.1561, 1.1517, 1.1467, 1.1394
Resistance: 1.1616, 1.1640, 1.1668, 1.1688
Support: 1.3733, 1.3654, 1.3574, 1.3527
Resistance: 1.3805, 1.3811, 1.3852, 1.3898
Support: 113.80, 113.03, 111.55, 111.23
Resistance: 115.45, 116.29, 116.79, 119.04
Support: 84.61, 84.14, 83.79, 83.02
Resistance: 85.03, 86.00, 87.46, 88.43
Support: 132.05, 131.48, 130.74, 130.48
Resistance: 132.62, 133.28, 133.63, 134.16
Support: 1.2315, 1.2250, 1.2219, 1.2131
Resistance: 1.2424, 1.2499, 1.2563, 1.2605
Support: 0.9200, 0.9150, 0.9118, 0.9072
Resistance: 0.9261, 0.9331, 0.9370, 0.9387
Let us see how trading reversals from one of last week’s key levels would have worked out:
We had expected the level at 1.3474 might act as support, 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 action rejected this level with a pin bar near the start of last Tuesday’s London/New York overlap session (typically a great time to be trading currency pairs involving the US dollar and British pound like this one) marked by the up arrow in the price chart below. This trade has been nicely profitable, achieving a maximum positive reward to risk ratio of more than 4 to 1 based upon the size of the entry candlestick.
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.