Trading Support And Resistance - Sunday, Sept. 30

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 October 2018

For the month of October, we forecast that the best trade will be long USD/JPY.

For the month of September, we forecast that the best trade would be short AUD/USD. The final performance to date was as follows:

Currency Pair

Forecast Direction

Interest Rate Differential

Final Performance

AUD/USD

Short ?

0.50% (2.00% – 1.50%)

-0.46%

Weekly Forecast September 30

Last week, we forecast that the AUD/USD currency pair would fall in value. It did, by 0.51%.

We make no weekly forecast this week, as there were no strong counter-trend price movements.

37% of the important currency pairs or crosses moved by more than 1% value over the past week. This volatility is relatively low, and we expect it to be similar over the coming week.

This week has been dominated by relative strength in the U.S. Dollar, and relative weakness in the Swiss Franc.

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

Previous Monthly Forecasts