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 11 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 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 March 2016
This month we forecasted that the highest-probability trades will be long USD/CAD and short NZD/USD. The performance so far is as follows:
Weekly Forecast 26th March 2017
Last week, we made no forecast, as there were no strong counter-trend movements.
This week, we forecast that the AUD/JPY currency cross will rise in value.
This week has been dominated by relative strength in the Euro and Japanese Yen, and relative weakness in the U.S. Dollar and the Australasian currencies.
Volatility was slightly lower than last week, with only 30% of the major and minor currency pairs changing in value by more than 1%. Volatility is likely to be lower still over this coming week.
You can trade our forecasts in a real or demo Forex brokerage account.
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:
That’s all for now. Our next newsletter will be coming to you next week, on Sunday 2nd April.
You can trade our forecasts in a real or demo Forex brokerage account.
Adam Lemon
Chief Instructor
FX Academy