November 24, 2022
  • November 24, 2022

Support and resistance trading -EUR/USD, GBP/USD

By on October 9, 2022 0

This week, I predicted that the EUR/NOK currency pair should increase in value.

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This week I’ll start with my monthly and weekly Forex predictions of the currency pairs to watch. The first part of my forecast is based on my research of the last 20 years of Forex prices, which shows that the following methodologies have all produced profitable results:

Let’s take a look at the relevant data on currency price movements and interest rates to date, which we have compiled using a trade-weighted index of major world currencies:

Changes in currency rates and interest rates

Monthly Forecast October 2022

For the month of October, I had forecast that the USD/JPY currency pair would increase in value. The result to date is shown below:

October 2022 Forex Forecast Performance

Weekly Forecast 9e October 2022

Last week, I didn’t do any weekly forecast, as there were no abnormally strong price movements against the trend. This week, I predicted that the EUR/NOK currency pair should increase in value.

The Forex market has seen a decline in direction volatility Last weekwith only 26% of the most important currency pairs and crossovers moving more than 1% in value. Directional volatility is expected to increase over the coming week as there are major central bank releases due.

Last week was dominated by the relative strength of the New Zealand and Canadian dollars, and the relative weakness of the Australian dollar.

You can trade my predictions on a live or demo Forex brokerage account.

Main 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 some key support and resistance levels that can be seen on the most popular currency pairs this week.

Main support and resistance levels

Let’s see how trading two of these key pairs last week on key support and resistance levels might have worked:

EUR/USD

We expected the level at $0.9999 to act as resistance in the EUR/USD currency pair Last week, as it previously acted as both support and resistance. Note how well these levels of “role reversal” can work. The H1 price chart below shows how the price rejected this level towards the end of last Tuesday’s New York session with a downtrend indoor candlestick, marked by the down arrow signaling the moment of the bullish rejection. This trade has been extremely profitablerealizing lots of positives reward/risk ratio over 13 to 1 depending on the size of the entry candlestick pattern.

EUR/USD hourly price table

GBP/USD

We expected the level at $1.1483 to act as resistance in GBP/USD currency pair Last week, as it previously acted as both support and resistance. Note how well these levels of “role reversal” can work. The H1 price chart below shows how price rejected this level at the start of last Wednesday’s London session with a strong bearish engulfing candlestick, marked by the down arrow signaling the moment of the bearish rejection. This is usually the ideal time to trade the British pound. This trade was profitablerealizing a maximum positive risk/reward ratio greater than 2 to 1 depending on the size of the entry candlestick pattern.

GBP/USD hourly price chart

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