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Today, I will begin with my monthly and weekly forecasts of the currency pairs worth watching. The first part of my forecast is based upon 20 years' worth of research of Forex prices, which shows that the following methodologies have all produced profitable results:

• Trading the two currencies that are trending the most strongly over the past six 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'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 for November 2023

For the month of November, I made no forecast, as the US dollar was making a deep counter-trend retracement.

Weekly Forecast for Sunday, Nov. 12, 2023

Last week, I forecasted that the NZD/USD and AUD/USD currency pairs would fall in value. This was a good call, as the NZD/USD currency pair fell by 1.81% and the AUD/USD currency pair fell by 2.37%, giving an average win of 2.09%.

This week, I will not provide a forecast as there were no unusually strong counter-trend price movements in the Forex market throughout the past trading period.

Directional volatility in the Forex market decreased last week, with 37% of the most important currency pairs fluctuating over the week by more than 1%. Volatility is likely to increase over the coming week, due mostly to the scheduled US CPI (inflation) data release. Last week was dominated by relative strength in the US dollar, and relative weakness was seen in the Australian dollar.

Key Support/Resistance Levels for Popular Pairs

I often 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 monitored on the more popular currency pairs this week.

Let's see how trading one of these key pairs last week off of key support and resistance levels could have worked out.

USD/CAD

I had expected the level at $1.3815 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 during last Friday’s New York/London session overlap (which can be a great time to enter trades in major currency pairs like this one) with a bearish pin bar, marked by the downward arrow, signaling the timing of this bearish rejection. This trade has been profitable so far, giving a maximum reward-to-risk ratio of more than 1 to 1 based upon the size of the entry candlestick.

(Click on image to enlarge) 

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