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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 July, I predict that the value of the currency pair USD/JPY will increase.
For the month of June, I predicted that the value of the GBP/USD currency pair would increase.
The final performance of this forecast was as follows:
I didn’t do any weekly forecast last week because there were no unusually large counter-trend price moves, which is the basis of my weekly trading strategy. There were no such price moves again last week, so again I am not making any weekly predictions for the coming week.
Directional volatility in the forex market decreased last week with none of the major currency pairs and crosses fluctuating more than 1% during the week. Volatility is likely to be higher over the next weekbecause the weekly schedule has some very important items and we are also witnessing the start of a new calendar month.
Last week was dominated by the relative strength of the euro and the relative weakness of the Canadian dollar and the Japanese yen.
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 one of these key pairs could have fared last week outside of key support and resistance levels:
I expected a level 155.91 JPY can serve as support currency cross EUR/JPY 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 not long after the start of last Monday’s London session (which can be a great time to enter forex trades with European currency pairs like this one) with a double inside the bars, 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 5 to 1 based on the size of the entry candlestick structure.