Support and resistance to trading
Get our trading strategies with our monthly and weekly forecasts of currency pairs to watch using support and resistance for the week of September 20, 2021.
This week we’ll start with our monthly and weekly forecasts of currency pairs to watch. The first part of our forecast is based on our research of Forex prices for the past 20 years, which shows that the following methodologies have all produced profitable results:
Trade the two trending currencies over the past 3 months.
Assuming that trends are usually ready to reverse after 12 months.
Trade versus very strong weekly counter-trend movements by currency pairs made during the previous one the 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 on currency price movements and interest rates to date, which we’ve compiled using a trade-weighted index of major global currencies:
Monthly Forecast September 2021
For the month of September, we had forecast that if the EUR / USD currency pair ended a week above 1.1908, it would likely rise again for the remainder of the month. The price has not yet exceeded 1.1908.
Weekly forecast 19e September 2021
Last week, we didn’t make any weekly forecasts, as there hasn’t been any unusually strong countertrend in the past week. We’re not doing any weekly forecasts again this week.
The Forex market has again seen a decline in the level of volatility Last week, with only 19% of all major currency pairs or crosses moving more than 1% in value. Vvolatility is expected to be much higher over the coming week.
The past week has been dominated by the relative strength of the US dollar and the relative weakness of the Swiss franc and Australian dollar.
You can trade our forecasts in a real or demo Forex brokerage account.
Key support / resistance levels for popular pairs
We teach that trades must be entered and exited at or very near the key support and resistance levels. Some key support and resistance levels can be seen on the most popular currency pairs this week.
Let’s see how the trading reversals of two of last week’s key levels would have worked:
AUD / USD
We expected the resistance level at 0.7375 to be able to act as resistance, as it had previously acted as both support and resistance. Note how well these “reversing” levels can work. The H1 chart below shows how the price rejected this level with a bearish candlestick near the doji during last Monday’s Asian session (usually a good time to trade currency pairs involving the US dollar like this) marked by the down arrow in the price chart below. This trade was very profitable, reaching a maximum positive reward / risk ratio of over 7 to 1 depending on the size of the entry candlestick.
EUR / JPY
We expected the level at 128.69 to be able to act as support, as it previously acted as both support and resistance. Note how well these “reversing” levels can work. The H1 chart below shows how the price rejected this level with an inside bar just before the New York opened last Thursday (usually a good time to trade Forex currency pairs) marked by the up arrow in the price chart below. This trade has been very profitable, so far reaching a maximum positive reward / risk ratio of over 3 to 1 depending on the size of the entry candlestick structure.
It’s all for this week. You can trade our forecasts on a real or demo Forex brokerage account to test the strategies and build your confidence before investing real funds.