Trading Support And Resistance – 8/28/2016

This week we’ll begin with our monthly and weekly forecasts of the currency pairs worth watching. The first part of our forecast is based upon our research of the past 11 years of Forex prices, which show that the following methodologies have all produced profitable results:

Let’s take a 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 August 2016

This month we forecasted that the best movements will be short GBP/USD and USD/JPY. The performance so far is positive, as shown below:

Weekly Forecast 28th August 2016

Last week, we made no forecast.

This week, we make no forecast, as there were no strong counter-trend moves.

This week has been dominated by strength in the British Pound, and weakness in the Japanese Yen and U.S. Dollars.

Volatility was very slightly greater than it was during the previous week, with only 40% of the major and minor currency pairs changing in value by more than 1%. Volatility is likely to be higher this coming week, which will be dominated by the U.S. Non-Farm Payrolls data release on Friday.

Key Support/Resistance Levels for Popular Pairs

We 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 should be watched on the more popular currency pairs this week, which might result in either reversals or breakouts:

Let’s see how trading one of these key pairs last week off key support and resistance levels could have worked out: