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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.

Monthly Forecast for September 2023

For the month of September, I forecast that the USD/JPY currency pair will gain in value. I made no forecast for the month of August, as I did not see any trends in the Forex market that looked reliable enough to depend upon.

Weekly Forecast for Sunday, Sept. 3, 2023

I will provide no forecast this week, as there were no unusually strong counter-trend price movements seen in recent trading days.

Directional volatility in the Forex market was very low last week, with only the EUR/USD currency pair fluctuating over the week by more than 1%. Volatility is likely to be higher over the coming week, as the beginning of the month of September typically sees an increase in trading volumes after the summer months.

Last week was dominated by relative strength in the Australian dollar, and relative weakness was seen in the euro.

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.

More By This Author:

Weekly Forex Forecast - Sunday, Sept. 3
EUR/USD Technical Analysis: Price In State Of Decline
GBP/USD Technical Analysis: Upward Rebound Limited