Trading Support and Resistance

Get our trading strategies with our monthly & weekly forecast of currency pairs worth watching using support & resistance for the week of March 28, 2022.

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This week I will begin with my monthly and weekly forecasts of the currency pairs worth watching. The first part of my forecast is based upon my research of the past 20 years of Forex prices, which show that the following methodologies have all produced profitable results:

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 March 2022

For the month of March, I forecasted last week that the EUR/USD currency pair would fall in value. Its performance to date is shown below.

Weekly Forecast 27^th March 2022

Last week I forecasted that the EUR/SEK currency cross would be likely to rise in value. Unfortunately, it fell in value by 0.56%.

This week, I make no weekly forecast, as there were no strong counter trend moves last week in the Forex market.

The Forex market saw its level of directional volatility decrease very slightly last week, with 52% of all the important currency pairs or crosses moving by more than 1% in value. Directional volatility is likely to fall at least a little over this coming week, as markets seem to have shifted into a more risk-on mode, and because there are fewer high-impact data releases scheduled.

Last week was again dominated by relative strength in the Australian Dollar, and relative weakness in the Japanese Yen.

You can trade my forecasts in a real or demo Forex brokerage account.

Key Support/Resistance Levels for Popular Pairs

I 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.

Let us see how trading reversals from one of last week’s key levels could have worked out:

USD/CHF

I had expected the level at 0.9372 might function as resistance, as it had acted previously as both support and resistance. Note how these “flipping” levels can work well. The H1 chart below shows how the price rejected this level with an outside bar at the start of last Tuesday’s London session, which is often a great time to enter trades in major currency pairs. The entry point is marked by the down arrow in the price chart below. This trade has been profitable, achieving a maximum positive risk reward ratio of more than 5 to 1 based upon the size of the entry candlestick.

That is all for this week. You can trade my forecasts in a real or demo Forex brokerage account to test the strategies and strengthen your self-confidence before investing real funds.