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 April 11, 2022.

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 April 2022

For the month of April, I forecasted that the US Dollar Index (USDX) will rise in value. It has risen by 0.75% to date this month.

Weekly Forecast 10^th April 2022

Last week, I forecasted that the EUR/NOK currency cross would be likely to fall in value, as it had made a strong counter-trend price movement over the previous week. This was a good call, as the EUR/NOK cross fell by 1.99% over the week.

This week I make no weekly forecast as there was no unusually strong counter-trend price movements in the Forex market last week.

The Forex market saw its level of directional volatility remain the same over the past week, with only 19% of all the important currency pairs or crosses moving by more than 1% in value. Directional volatility is likely to increase sharply over this coming week, as there are several high-impact data releases scheduled.

Last week was dominated by relative strength in the US Dollar, and relative weakness in the Euro.

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.

Currency Pair	Key Support / Resistance Levels
AUD/USD	Support: 0.7454, 0.7430, 0.7321, 0.7275 Resistance: 0.7468, 0.7493, 0.7523, 0.7557
EUR/USD	Support: 1.0710, 1.0639, 1.0615, 1.0572 Resistance: 1.0937, 1.0956, 1.0985, 1.1025
GBP/USD	Support: 1.3000, 1.2785, 1.2650, 1.2624 Resistance: 1.3052, 1.3181, 1.3236, 1.3316
USD/JPY	Support: 123.12, 122.34, 121.36, 120.49 Resistance: 125.00, 125.28, 125.85, 126.36
AUD/JPY	Support: 92.32, 01.37, 91.04, 90.52 Resistance: 93.12, 97.00, 97.30, 100.00
EUR/JPY	Support: 134.35, 133.76, 133.39, 132.35 Resistance: 136.31, 137.00, 138.96, 140.00
USD/CAD	Support: 1.2538, 1.2472, 1.2372, 1.2250 Resistance: 1.2586, 1.2651, 1.2675, 1.2753
USD/CHF	Support: 0.9314, 0.9280, 0.9224, 0.9072 Resistance: 0.9372, 0.9381, 0.9438, 0.9470

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

USD/JPY

I had expected the level at ¥122.33 might function as support, as it acted as both support and resistance alternately during the previous week. Note how such flipping levels can be very reliable reversal points. I was also happy to look for a long trade in this currency pair due to its recent very strong bullish price momentum. The H1 chart below shows how the price rejected this level with an inside bar not long after the start of last Monday’s Tokyo session, which is often a great time to enter trades in currency pairs involving Asian currencies such as the USD/JPY. The entry point is marked by the up arrow within the price chart below. This trade has been nicely profitable, achieving a maximum positive risk reward ratio so far of more than 3 to 1 based upon the size of the entry candlestick structure.

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.