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:

• 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’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:

Monthly Forecast October 2019

For the remainder of the month of October, we forecast that the best trades will be long GBP/USD and long GBP/JPY.

For the month of September, we forecast that the best trades would be short NZD/JPY and short EUR/JPY. The final performances are shown below:

Weekly Forecast 13th October 2019

Last week, we made no weekly forecast as there were no strong counter trend moves. There were several such strong moves this week, but we feel their quality is not good enough to trade.

The Forex market has become more active, with 55% of the important currency pairs and crosses moving by more than 1% in value over the past week. Volatility is likely to remain at a similar level over the coming week.

Last week was dominated by relative strength in the British Pound, 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: