Trading Support And Resistance - April 8, 2018

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 16 years of Forex prices, which show that the following methodologies have all produced profitable results:

Trading the two currencies that are trending the most strongly over the past 3 months.

Assuming that trends are usually ready to reverse after 12 months.

Trading against very strong counter-trend movements by currency pairs made during the previous week.

Buying currencies with high interest rates and selling currencies with low interest rates.

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 April 2018

This month, we forecast that the best trades would be long EUR/USD and long GBP/USD. The performance so far is as follows:

Currency Pair

Forecast Direction

Interest Rate Differential

Performance to Date

EUR/USD

Long ?

-1.75% (0.00% – 1.75%)

-0.34%

GBP/USD

Long ?

-1.25% (0.50% – 1.75%)

0.42%

Weekly Forecast 8th April 2018

Last week, we made no weekly forecast, as there were no strong counter-trend movements that week.

This week, we make no weekly forecast, as there were again no strong counter-trend movements.

This week has been dominated by relative strength in the Canadian Dollar, and relative weakness in the Japanese Yen.

Volatility was much about the same as it was last week, with only approximately 22% of the major or minor currency pairs changing in value by more than 1%. Volatility is likely to be similar next week.

Previous Monthly Forecasts