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

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

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 November 2022

I make no forecast for the remainder of the month of November, I think markets are too unsettled to look beyond the next few days.

Weekly Forecast 13th November 2022

Last week, I forecasted that the GBP/JPY currency cross is likely to rise in value over the coming week. Unfortunately, the price fell by 1.52% over the week, as the Yen was even stronger than the Pound.

The Forex market saw a strong increase in directional volatility last week, with 70% of the most important currency pairs and crosses moving by more than 1% in value. Directional volatility is likely to fall over the coming week.

Last week was dominated by relative strength in the Japanese Yen, 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.

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/CAD

I had expected the level at $1.3568 might act as resistance in the USD/CAD 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 start of last Thursday’s New York session with a bearish inside candlestick, marked by the down arrow signaling the timing of the bearish rejection. This trade has been extremely profitable, achieving a maximum positive reward to risk ratio of more than 10 to 1 so far based upon the size of the entry candlestick structure, which is also an interesting chart pattern combining a hammer candlestick, an inside candlestick, and an engulfing candlestick.

USD/CAD 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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