Trading Support and Resistance

Adam Lemon

Get our trading strategies with our monthly & weekly forecast of currency pairs worth watching using support & resistance for the week of January 3, 2022.

This week I will begin with my monthly and weekly forecasts of the currency pairs worth watching. The first part of my 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:

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 January 2022

For the month of January, I believe it will be wise to wait and see how the markets perform over the first week of this new year before making any forecasts.

For the month of December, I forecasted that the GBP/USD and EUR/USD currency pairs would fall in value. The final performances are shown below:

Currency Pair

Forecast Direction

Interest Rate Differential

Final Performance

EUR/USD

Short ↓

+0.25% (0.25% - 0.00%)

-0.40%

GBP/USD

Short ↓

+0.00% (0.25% - 0.25%)

-1.77%

Weekly Forecast 2nd January 2022

In my previous forecast last week, we made no weekly forecast, as there were no unusually strong counter-trend movements. Fading strong weekly counter-trend price movements is the basis of our weekly trading strategy.

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

The Forex market saw a decrease in its level of directional volatility last week, due to the complete lack of any high-impact data releases, with only 30% of all the important currency pairs or crosses moving by more than 1% in value. Directional volatility is likely to increase this week as we begin a New Year and get FOMC meeting minutes and non-farm payrolls data.

Last week was dominated by relative strength in the Canadian Dollar, 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.

Currency Pair

Key Support / Resistance Levels

AUD/USD

Support: 0.7237, 0.7123, 0.7102, 0.7083

Resistance: 0.7302, 0.7321, 0.7344, 0.7390

EUR/USD

Support: 1.1360, 1.1343, 1.1294, 1.1261

Resistance: 1.1394, 1.1456, 1.1514, 1.1600

GBP/USD

Support: 1.3527, 1.3375, 1.3340, 1.3304

Resistance: 1.3606, 1.3638, 1.3709, 1.3769

USD/JPY

Support: 115.02, 114.53, 113.95, 113.07

Resistance: 115.25, 116.29, 116.79, 119.04

AUD/JPY

Support: 83.19, 82.85, 81.30, 81.05

Resistance: 84.14, 84.35, 84.83, 84.96

EUR/JPY

Support: 130.64, 130.51, 129.94, 128.97

Resistance: 131.78, 132.00, 132.93, 133.63

USD/CAD

Support: 1.2611, 1.2571, 1.2499, 1.2480

Resistance: 1.2680, 1.2738, 1.2812, 1.2901

USD/CHF

Support: 0.9072, 0.9000, 0.8969, 0.8943

Resistance: 0.9181, 0.9200, 0.9219, 0.9229

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.

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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