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 June 13, 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 my 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

Currency Price Changes and Interest Rates

Monthly Forecast June 2022

For the month of May, I forecasted that the US Dollar Index (USDX) would rise in value. Unfortunately, it fell during that month by 0.64%.

For the month of June, I forecast that the US Dollar Index will rise in value.

Weekly Forecast 12th June 2022

I made no weekly forecast in my previous piece two weeks ago.

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

The Forex market saw its level of directional volatility rise last week, with 44% of all the important currency pairs or crosses moving by more than 1% in value. Directional volatility is likely to decrease or remain the same over this coming week.

Last week was dominated by relative strength in the US Dollar, and relative weakness in the Japanese Yen.

You can trade my forecasts in a real or demo Forex brokerage account.

Key Support/Resistance Levels for Popular Pairs

I 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: 0.7125, 0.7038, 0.7008, 0.6996 Resistance: 0.7180, 0.7227, 0.7275, 0.7321
EUR/USD
Support: 1.0509, 1.0457, 1.0391, 1.0350 Resistance: 1.0540, 1.0645, 1.0672, 10760
GBP/USD
Support: 1.2277, 1.2217, 1.2139, 1.1976 Resistance: 1.2330, 1.2386, 1.2412, 1.2437
USD/JPY
Support: 133.29, 132.99, 130.84, 130.00 Resistance: 134.50, 135.00, 135.50, 136.00
AUD/JPY
Support: 94.59, 93.60, 92.94, 91.99 Resistance: 95.00, 95.54, 96.16, 96.39
EUR/JPY
Support: 140.67, 140.00, 138.26, 136.83 Resistance: 141.40, 142.12, 142.80, 143.62
USD/CAD
Support: 1.2684, 1.2619, 1.2587, 1.2382 Resistance: 1.2869, 1.2895, 1.2953, 1.2995
USD/CHF
Support: 0.9833, 0.9713, 0.9671, 0.9606 Resistance: 0.9983, 1.0035, 1.0111, 1.0139


Let us see how trading reversals from one of last week’s key levels could have worked out:Key Support and Resistance Levels

EUR/USD

I had expected the level at $1.0760 might function as resistance, as it had previously functioned as both support and resistance. Note how suchflipping” levels can be very reliable reversal points. The H1 chart below shows how the price rejected this level with a bearish pin bar right at the start of the New York session last Thursday, which is typically a great time to be trading Forex. Note also that the ECB was just giving a major policy release, and the rejection was also confluent with a descending trend line. The entry point is marked by the down arrow within the price chart below. This trade has been nicely profitable so far, achieving a maximum positive risk reward ratio slightly higher than 4 to 1 based upon the size of the entry candlestick.

EUR/USD Hourly Chart

EUR/USD Hourly Chart

That is all for this week. You can trade my 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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