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:
- Trading the two currencies that are trending the most strongly over the past 6 months.
- Trading against very strong weekly counter-trend movements by currency pairs made during the previous week.
- Carry Trade: Buying currencies with high interest rates and selling currencies with low interest rates.
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:
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.
For the month of October, I forecasted that the USD/JPY currency pair would increase in value. The result was nicely profitable:
Weekly Forecast 6th November 2022
This week, I forecast that the GBP/JPY currency cross is likely to rise in value over the coming week.
The Forex market saw an increase in directional volatility last week, with 56% of the most important currency pairs and crosses moving by more than 1% in value. Directional volatility may remain relatively high over this coming week as there is a very crucial release of US CPI (inflation) data.
Last week was dominated by relative strength in the New Zealand Dollar, and relative weakness in the British Pound.
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.
Ready to trade our Forex weekly forecast? Here’s a list of some of the best Forex trading platforms to check out.