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This week I’ll start with my monthly and weekly Forex forecast of currency pairs worth watching. The first part of my forecast is based on my research on Forex prices over the past 20 years, which shows that all of the following methodologies have produced profitable results:
Let’s take a look at the relevant data on currency price changes and interest rates to date, which we have compiled using a trade-weighted index of the world’s major currencies:
For the month of June, I predicted that the value of the GBP/USD currency pair would increase.
The performance of this forecast so far is as follows:
Last week I predicted that the AUD/USD currency pair is slightly more likely than not to decline, while the EUR/NOK currency cross is likely to rise. Unfortunately, both calls were wrong: AUD/USD rose 1.93%, while EUR/NOK fell 0.18%.
Directional volatility in the forex market rose to 48 last week% of major currency pairs and crosses fluctuating more than 1% during the week. Volatility is likely to be lower over the next weekbecause the weekly schedule contains significantly fewer important items than last week.
The relative strength of the Australian dollar and the relative weakness of the Japanese yen dominated last week.
You can trade my predictions in real or demo Forex broker account.
I teach that trades should be entered and exited at or very close key support and resistance levels. There are certain key support and resistance levels to watch on the more popular currency pairs this week.
Let’s take a look at how trading two of these key pairs could have gone last week without key support and resistance levels:
I expected a level $0.6895 can act as resistance currency pair AUD/USD last week, as it previously functioned as both support and resistance. Notice how these “role reversal” levels. it can work well. The H1 price chart below shows how price rejected this level right at the end of Friday’s Tokyo session (which can be a great time to enter forex trades with Australian currency pairs like this) with a small pin bar, indicated by the down arrow in the price chart below signaling the timing of this bullish rejection. This store was profitable, with a maximum reward to risk ratio of more than 2 to 1 so far according to the size of the entry candlestick.
I expected a level 139.03 JPY can serve as support currency pair USD/JPY last week, as it previously functioned as both support and resistance. Notice how these “role reversal” levels can work well. The H1 price chart below shows how price rejected this level early in the New York session on Tuesday (which can be a great time to trade major Forex currency pairs like this) with big engulfing candlestick, indicated by the up arrow in the price chart below signaling the timing of this bullish rejection. This store was profitable, providing a maximum reward-to-risk ratio of more than 2 to 1 based on the size of the entry candlestick structure.