Trade support and resistance

Get our trading strategies with our monthly and weekly predictions of currency pairs to watch using support and resistance for the week of July 4, 2022.

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This week I will start with my monthly and weekly predictions of the currency pairs to watch. The first part of my forecast is based on my research of the last 20 years on Forex prices, which shows that the following methodologies have all produced profitable results:

Let’s take a look at the relevant data on currency price movements and interest rates to date, which we have compiled using a trade-weighted index of major world currencies:

Changes in currency rates and interest rates

Monthly forecast July 2022

For the month of June, I forecast that the US dollar index would increase in value. It did, by 0.69%, producing a profitable trade.

For the month of July, I expect the EUR/USD currency pair and the GBP/USD currency pair to both lose value.

Weekly Forecast 3rd July 2022

Last week, I didn’t make any weekly forecast.

This week, I am not making any weekly forecast again, as last week no major counter-trend price movement was seen during the week.

The Forex market has seen its level of direction volatility increase last weekwith 44% of all major currency pairs or crosses moving more than 1% in value. Directional volatility is expected to rise further in the week ahead because there are so few major data releases planned.

Last week was dominated by the relative strength of the Swiss franc and the relative weakness of the Australian dollar.

You can trade my predictions on a live or demo Forex brokerage account.

Main support/resistance levels for popular pairs

I teach that trades should be entered and exited at or very close to the key support and resistance levels. There are some key support and resistance levels that can be seen on the most popular currency pairs this week.

currency pair

Main support/resistance levels

AUD/USD

Support: 0.6767, 0.6683, 0.6570, 0.6556 Resistance: 0.6848, 0.6915, 0.7000, 0.7038

EUR/USD

Support: 1.0350, 1.0300, 1.0300, 1.0250 Resistance: 1.0433, 1.0486, 1.0535, 1.0601

GBP/USD

Support: 1.2043, 1.1976, 1.1901, 1.1695 Resistance: 1.2102, 1.2137, 1.2212, 1.2222

USD/JPY

Support: 134.92, 134.27, 132.27, 131.00 Resistance: 135.99, 136.17, 136.44, 137.00

USD/JPY

Support: 92.00, 91.53, 90.58, 90.30 Resistance: 92.72, 93.42, 94.20, 95.00

EUR/JPY

Support: 142.12, 141.20, 140.67, 140.00 Resistance: 140.00, 138.26, 136.83, 134.59

USD/CAD

Support: 1.2844, 1.2805, 1.2684, 1.2619 Resistance: 1.2953, 1.3025, 1.3127, 1.3179

USD/CHF

Support: 0.9574, 0.9532, 0.9498, 0.9438 Resistance: 0.9633, 0.9728, 0.9833, 0.9983

Let’s see how the trading reversals of two of last week’s key levels could have worked:

EUR/USD

I expected the level at $1.0601 could work as a resistoras it previously served as both support and resistance. Notice how suchreversal levels can be very reliable reversal points. The H1 graph below shows how the price rejected this level with a decline pin bar during last Monday’s London/New York overlap, which is generally a good time to trade Forex. The entry point is marked by the down arrow in the price chart below. This trade has been very profitable so farreaching a maximum positive risk-reward ratio of just over 9 to 1 depending on the size of the entry candlestick.

EUR/USD hourly chart

EUR/USD hourly chart

USD/CHF

I had predicted the level at 0.9498 can serve as supportas it previously served as both support and resistance. Notice how suchreversal levels can be exceptionally reliable reversal points. The H1 graph below shows how price rejected this level with a very clear bullish reversal – a candlestick that was part doji, part pin bar – just before last Wednesday’s London/New York straddle, which is usually the perfect time to trade the Forex. The entry point is marked by the up arrow in the price chart below. This trade has been profitable so farreaching a maximum positive risk/reward ratio of just over 6 to 1 depending on the size of the entry candlestick.

USD/CHF hourly chart

USD/CHF hourly chart

It’s all for this week. You can trade my predictions on a live or demo Forex brokerage account to test the strategies and build your confidence before investing real funds.

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