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 July 2021
For the month of July, we forecast that the EUR/USD currency pair will fall in value, while the USD/JPY currency pair will rise in value.
For the month of June, we forecasted that the USD/CAD currency pair would fall in value, and the CAD/JPY currency cross would rise in value. The final performance of this forecast is shown below:
Weekly Forecast 4th July 2021
Last week, we made no weekly forecast, as there were no large counter-trend price movements in any important currency pairs or crosses.
We again make no forecast this week.
The Forex market saw its level of volatility drop sharply last week, with not one single important currency pair or cross moving by more than 1% in value. Volatility is likely to remain low over the coming week.
Last week was dominated by relative strength in the U.S. dollar, and relative weakness in the Australian dollar, but the numbers were so small as to be practically negligible.
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.
Key Support and Resistance Levels