Trading Support And Resistance - Sunday, Jan. 19

This week we’ll 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 16 years of Forex prices, which show that the following methodologies have all produced profitable results:

Let’s 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:

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Monthly Forecast January 2020

For the month of January, we forecast that the best trades would be long EUR/USD and long NZD/USD. The performances to date are as follows:

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Weekly Forecast January 19

We made no weekly forecast last week, and we do the same this week, as there were no strong counter-trend movements last week.

The Forex market has again shown decreased activity, with only 4% of the important currency pairs and crosses moving by more than 1% in value over the past week. The volatility of major currencies was reported last week to be at a 30-year low. Volatility is likely to be higher over the coming week. A sharp rise in volatility will become more likely the longer this period of low volatility continues.

Last week was dominated by relative strength in the Swiss Franc, and relative weakness in the Japanese Yen.

Previous Monthly Forecasts

You can view the results of our previous monthly forecasts here.

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 should be watched on the more popular currency pairs this week, which might result in either reversals or breakouts:

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