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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.

(Click on image to enlarge)

Monthly Forecast for October 2023

For the month of October, I forecasted that the USD/JPY currency pair would gain in value. The result so far is as follows:

Weekly Forecast for Sunday, Oct. 8, 2023

Last week, I gave no weekly forecast, as there were no strong counter-trend price movements. I once again will not provide a weekly forecast at this time.

Directional volatility in the Forex market remained low last week, with only 11% of the most important currency pairs fluctuating by more than 1%. Volatility is likely to increase over the coming week, as there will be a release of US CPI (inflation) data, which is usually the key item driving the Forex market.

Last week was dominated by relative strength in the Swiss franc, and relative weakness was seen in the Canadian 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.

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