Get our trading strategies with our monthly & weekly forecasts of currency pairs worth watching using support & resistance for the week of August 10, 2021.
This week we will begin with our monthly and weekly forecasts of the currency pairs worth watching. The first part of our forecast is based upon our research of the past 18 years of Forex prices, which show that the following methodologies have all produced profitable results:
Assuming that trends are usually ready to reverse after 12 months.
Trading against very strong counter-trend movements by currency pairs made during the previous week.
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 August 2021
For the month of August, we make no forecast as there are no clear trends in the Forex market showing very strong momentum.
For the month of July, we forecasted that the EUR/USD currency pair would fall in value, while the USD/JPY currency pair would rise in value. The final performance was negative and is shown below:
The last 2 weeks, we made no weekly forecast, as there were no large counter-trend price movements in any important currency pairs or crosses.
We again make no forecast this week.
The Forex market saw moderate volatility last week. The seven Forex majors moved an average of 0.58%, with the largest percentage move coming from USDCHF, the only Forex major to move by more than 1% in value.
Volatility is likely to remain about the same over the coming week.
Last week, the US dollar showed strength against the euro and Swiss franc, which contributed to a positive US Dollar Index move. The Aussie dollar and New Zealand dollar, on the other hand, both notched up gains against the US dollar of 0.14% and 0.55% respectively.
You can trade our forecasts in a real or demo Forex brokerage account.
Previous Monthly Forecasts
Key Support/Resistance Levels for Popular Pairs
We 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.
Let us see how trading reversals from last week’s levels could have worked out:
We had expected 1.1875 and 1.1895 to act as resistance, as they had acted as resistance levels in early July. The H1 chart below shows how 1.1875 acted as a minor resistance, but it was 1.1895 that that acted as a level that turned the price around to a downtrend. The price has since fallen by 140 pips from the first resistance level, and 160 pips from the second resistance area. 1.1895 was tapped multiple times to give several opportunities to enter short trades in EUR/USD.
We had expected the level at 1.3934 might act as resistance, as it had acted previously as support previously. Note that “flipping” levels, i.e. support turning into resistance, and vice versa, can work out well. The H1 chart below shows how the price rejected over a period of several days.
That is all for this week. You can trade our forecasts in a real or demo Forex brokerage account to test the strategies and strengthen your self-confidence before investing real funds.