Trading Support And Resistance - Sunday, Jan. 6

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 take a 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 December 2018

For the month of January, we forecast that the best trades would be short USD/JPY and long USD/CAD. The performance to date is as follows:

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For the month of December, we forecast that the best trades would be short EUR/USD, short GBP/USD, and long USD/JPY. 

The final performance was as follows:

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Weekly Forecast January 7

We made no forecast last week, as there were no exceedingly strong counter-trend moves. We again make no forecast this week as the only strong counter-trend move was against a very weak downwards trend in the CAD/CHF currency cross.

44% of the important currency pairs or crosses moved by more than 1% in value over the past week. Volatility has increased substantially and is most likely to remain at a similar level over the coming week.

This week has been dominated by relative strength in the Canadian Dollar, and relative weakness in the U.S. Dollar.

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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