This week we will 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 18 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 April 2021
For the month of April, we again forecast that the USD/JPY currency pair will rise in value, while the EUR/USD currency pair will fall.
For the month of March, we forecasted that the USD/JPY currency pair would rise in value, while the EUR/USD currency pair will fall. The performance was nicely positive:
Weekly Forecast 4th April 2021
This week, we make no weekly forecast, as there were no strong counter-trend movements in the Forex market whatsoever last week.
The Forex market showed a very low level of volatility last week, with only 11% of the important currency pairs and crosses moving by more than 1% in value. Volatility is likely to remain relatively low over the coming week.
Last week was dominated by relative strength in the New Zealand dollar, and relative weakness in the Japanese yen.
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.
