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 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 October 2020
This month, we forecasted that the USD/JPY currency pair was likely to fall in value. Its performance to date is as follows:
Weekly Forecast 25th October 2020
Last week, forecasted that the AUD/USD was likely to rise in value. This was a good call, as the currency pair ended the week up by 0.81%.
This week, we make no weekly forecast.
The Forex market showed a much lower level of volatility compared to the previous week, with only 11% of the important currency pairs and crosses moving by more than 1% in value last week. Volatility is likely to be at a considerably higher level this week, however.
Last week was dominated by relative strength in New Zealand, and relative weakness in the U.S. Dollar.
You can trade our forecasts in a real or demo Forex brokerage account.
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.
That is all for this week. You can trade our forecasts in a real or demo Forex brokerage account to test the strategies and strengthen your self-confidence before investing real funds.