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 on our research of the past 16 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 3 months.

• 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.

• 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 2020

This month, we forecast that the EUR/USD currency pair would be likely to fall in value. Its performance so far this month is as follows:

Weekly Forecast November 22

Last week, we forecast that the USD/JPY currency pair would fall in value. This was an excellent and profitable call, as the currency pair fell over the week by 0.70%.This week, we make no weekly forecast, as we saw no unusually strong counter-trend movements last week.

The Forex market showed a considerably lower level of volatility compared to the previous week, with less than 8% of the important currency pairs and crosses moving by more than 1% in value last week. Volatility is likely to remain at a similarly low level over the coming week.

Last week was dominated by relative strength in the New Zealand dollar, and relative weakness in 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 can be watched on the more popular currency pairs this week.