Trading Support and Resistance – USD/CHF, USD/CAD, EUR/USD, GBP/USD

For the month of October, I forecast that the USD/JPY currency pair will increase in value.

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

Monthly Forecast October 2022

For the month of October, I forecast that the USD/JPY currency pair will increase in value.

For the month of September, I forecasted that the EUR/USD currency pair and the GBP/USD currency pair would decline in value, while the USD/JPY currency pair would increase in value. The positive result is shown below:

 

September 2022 Forex Forecast Performance

Weekly Forecast 2nd October 2022

Last week, I forecasted that the CAD/JPY currency cross was likely to increase in value. This was not a good call, as this cross increased over the week by 0.89%. Last week we saw a strong counter trend move in the GBP/USD currency pair, so I forecast that is will decrease in value over the coming week.

The Forex market saw an increase in directional volatility last week, with 77% of all the important currency pairs or crosses moving by more than 1% in value. Directional volatility is likely to remain high over this coming week as there are several major central bank releases due.

Last week was dominated by relative strength in the British Pound, and relative weakness in the Australian, New Zealand, and Canadian Dollars, and the Swiss Franc.

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.

Key Support and Resistance Levels

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

USD/CHF

We had expected the level at 0.9738 might act as support in the USD/CHF currency pair last week, as it had acted previously as both support and resistance. Note how these “role reversal” levels can work well. The H1 price chart below shows how the price rejected this level towards the end of last Thursday’s New York session with a bullish hammer candlestick, marked by the up arrow signaling the timing of the bullish rejection. This trade has been extremely profitable, achieving a maximum positive reward to risk ratio of more than 4 to 1 based upon the size of the entry candlestick.

USD/CHF Hourly Price Chart

Ready to trade our weekly Forex analysis? We’ve made a list of the best brokers to trade Forex worth using.

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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