Get our trading strategies with our monthly & weekly forecast of currency pairs worth watching using support & resistance for the week of November 1, 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 November 2021
For the month of November, we forecast that the EUR/USD currency pair will fall in value.
For the month of October, we forecasted that the EUR/USD currency pair would fall in value. The result of this forecast was positive, as shown below:
Interest Rate Differential
+0.25% (0.25% - 0.00%)
Weekly Forecast 31st 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, as there were again no strong moves to fade, which is the basis of our weekly trading strategy.
The Forex market saw a very small increase in its level of volatility last week, with only 11% of all the important currency pairs or crosses moving by more than 1% in value. Directional volatility is likely to increase next week as there are three major central banks giving their monthly policy releases: the US Federal Reserve, the Bank of England, and the Reserve Bank of Australia. There will also be a release of non-farm payrolls data.
Last week was dominated by relative strength in the Australian dollar, and relative weakness in the euro.
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: 0.7478, 0.7437, 0.7408, 0.7366
Resistance: 0.7527, 0.7548, 0.7569, 0.7636
Support: 1.1536, 1.1517, 1.1467, 1.1394
Resistance: 1.1568, 1.1574, 1.1624, 1.1671
Support: 1.3654, 1.3574, 1.3527, 1.3502
Resistance: 1.3769, 1.3852, 1.3898, 1.3950
Support: 113.88, 113.03, 111.55, 111.23
Resistance: 114.10, 114.46, 115.45, 116.29
Support: 84.96, 84.61, 84.14, 83.79
Resistance: 87.46, 88.43, 89.49, 89.69
Support: 131.48, 130.74, 130.48, 130.03
Resistance: 132.35, 132.93, 133.63, 134.16
Support: 1.2372, 1.2250, 1.2219, 1.2131
Resistance: 1.2402, 1.2499, 1.2563, 1.2605
Support: 0.9150, 0.9072, 0.9000, 0.8969
Resistance: 0.9176, 0.9248, 0.9270, 0.9331
Let us see how trading reversals from one of last week’s key levels would have worked out:
We had expected the level at 1.1668 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 action rejected this level with a bearish inside bar right at the end of last Thursday’s New York / overlap session (typically one of the best times to trade major currency pairs like this one) marked by the down arrow in the price chart below. This trade has been very profitable, achieving a maximum positive risk reward ratio greater than 7 to 1 based upon the size of the entry candlestick structure.
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.