Trading Support and Resistance – AUD/JPY, EUR/USD, GBP/USD

Adam Lemon

Get our trading strategies with our monthly & weekly forecast of currency pairs worth watching using support & resistance for the week of August 15, 2022.

This week I will begin with my monthly and weekly Forex forecast 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 August 2022

For the month of August, I forecasted that the EUR/USD currency pair would decline in value. The result so far is shown below:

Currency Pair
Forecasted Direction
Interest Rate Differential
Performance to Date
EUR/USD
Short ↓
+2.00% (2.50% - 0.50%)
-0.30%

 

 

Monthly Forex Forecast Performance

Weekly Forecast 14th August 2022

This week, I forecast that the NZD/USD currency pair will fall in value over the week, as it made a strong counter-trend price movement last week.

The Forex market saw a much higher level of directional volatility last week, with 59% of all the important currency pairs or crosses moving by more than 1% in value. Directional volatility is likely to be at least a little lower over this coming week as although there are some key news releases scheduled, we are unlikely to see anything with as strong an impact on the market as last week’s US CPI data release.

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

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: 0.7085, 0.7063, 0.7010, 0.6951Resistance: 0.7141, 0.7213, 0.7248, 0.7275
EUR/USD
Support: 1.0240, 1.0220, 1.0202, 1.0073Resistance: 1.0280, 1.0305, 1.0362, 1.0382
GBP/USD
Support: 1.2100, 1.1958, 1.1926, 1.1878Resistance: 1.2206, 1.2243, 1.2338, 1.2386
USD/JPY
Support: 133.11, 132.65, 131.73, 130.00Resistance: 134.41, 135.32, 135.82, 136.59
AUD/JPY
Support: 94.67, 94.39, 93.61, 91.88Resistance: 95.23, 95.54, 96.16, 96.39
EUR/JPY
Support: 136.49, 135.72, 134.97, 134.03 Resistance: 137.74, 138.53, 140.22, 141.14
USD/CAD
Support: 1.2684, 1.2619, 1.2587, 1.2372Resistance: 1.2818, 1.2866, 1.2880, 1.2924
USD/CHF
Support: 0.9372, 0.9306, 0.9280, 0.9224Resistance: 0.9451, 0.9510, 0.9564, 0.9593

Let’s see how trading one of these key pairs last week off key support and resistance levels could have worked out:

AUD/JPY

We had expected the level at 93.24 might act as support, as it had acted previously as both support and resistance. Note how these “role reversal” levels can work well. The H1 chart below shows how the price broke above this level right at the the start of last Monday’s Asian session, and then tested it and rejected it from above with an engulfing candlestick marked by the up arrow signaling the timing of the bullish bounce. This trade has been very profitable, achieving a maximum positive reward to risk ratio of more than 3 to 1 so far based upon the size of the entry candlestick structure.

AUD/JPY Hourly Price Chart

AUD/JPY Hourly Price Chart

Ready to trade our weekly Forex forecast? Here are the best Forex brokers to choose from.

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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