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 May 30, 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 May 2022

For the month of May, I forecasted that the US Dollar Index (USDX) would rise in value. So far, it has fallen by 0.79% this month to date.

Weekly Forecast 29^th May 2022

Last week, I forecasted that the USD/CHF currency pair would rise in value. Unfortunately, it declined last week by 1.79%.

I make no forecast this week, as there were no unusually strong counter-trend price movements in the Forex market last week.

The Forex market saw its level of directional volatility fall again last week, with 33% of all the important currency pairs or crosses moving by more than 1% in value. Directional volatility is likely to decrease or remain the same over this coming week.

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

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/CAD

I had expected the level at $1.2869 might function as resistance, as it had previously functioned as both support and resistance. Note how such “flipping” levels can be very reliable reversal points. The H1 chart below shows how the price rejected this level with a bearish pin bar at the start of the New York session last Wednesday, which is typically a great time to be trading Forex. The entry point is marked by up down arrow within the price chart below. This trade has been nicely profitable so far, achieving a maximum positive risk reward ratio of more than 4 to 1 based upon the size of the entry candlestick.

USD/CAD Hourly Chart

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.