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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 April 25, 2022.

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:

Trading the two currencies that are trending the most strongly over the past 6 months.Trading against very strong weekly counter-trend movements by currency pairs made during the previous week.Carry Trade: Buying currencies with high interest rates and selling currencies with low interest rates.

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 April 2022

For the month of April, I forecasted that the US Dollar Index (USDX) will rise in value. It has risen by 1.98% to date so far this month.

Weekly Forecast 24th April 2022

Last week, I made no weekly forecast as there were no unusually strong counter-trend price movements in the Forex market over the previous week. I again make no forecast this week.

The Forex market saw its level of directional volatility again increase over the past week, with 44% of all the important currency pairs or crosses moving by more than 1% in value. Directional volatility is likely to remain the same over this coming week.

Last week was dominated by relative strength in the Euro and the US Dollar, and relative weakness in the British Pound, Japanese Yen, and Swiss Franc.

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.

Currency Pair

Key Support / Resistance Levels

AUD/USD

Support: 0.7200, 0.7082, 0.7006, 0.6963

Resistance: 0.7275, 0.7321, 0.7346, 0.7381

EUR/USD

Support: 1.0710, 1.0639, 1.0615, 1.0572

Resistance: 1.0831, 1.0937, 1.0956, 1.0985

GBP/USD

Support: 1.2785, 1.2650, 1.2624, 1.2575

Resistance: 1.3083, 1.3108, 1.3181, 1.3236

USD/JPY

Support: 127.50, 126.02, 125.72, 124.93

Resistance: 129.50, 130.00, 130.50, 131.00

AUD/JPY

Support: 92.90, 92.32, 91.37, 91.04

Resistance: 93.51, 94.76, 97.00, 97.30

EUR/JPY

Support: 137.00, 136.47, 135.51, 135.13

Resistance: 138.96, 140.00, 140.67, 141.00

USD/CAD

Support: 1.2682, 1.2638, 1.2587, 1.2538

Resistance: 1.2753, 1.2778, 1.2795, 1.2901

USD/CHF

Support: 0.9560, 0.9515, 0.9498, 0.9438

Resistance: 0.9647, 0.9678, 0.9747, 0.9848

Let us see how trading reversals from two of last week’s key levels could have worked out:

GBP/USD

I had expected the level at 1.3083 might function as resistance, as it acted as both support and resistance alternately during the previous week. Note how such flipping levels can be very reliable reversal points. I was also happy to look for a short trade at this level due to the long-term bearish trend in this currency pair. The H1 chart below shows how the price rejected this level with a pin bar during the London session last Thursday, which is often a great time to enter trades in major currency pairs. The entry point is marked by the down arrow within the price chart below. This trade has been very profitable, achieving a maximum positive risk reward ratio so far of more than 7 to 1 based upon the size of the entry candlestick.

EUR/JPY

I had expected the level at 136.47 might function as support, as it acted as both support and resistance earlier. Note how such flipping levels can be very reliable reversal points. The H1 chart below shows how the price rejected this level with a pin bar right at the start of last Monday’s Tokyo session, which is often a great time to enter trades in currency pairs involving the Japanese Yen when it is strongly trending, as it was last week. The entry point is marked by the up arrow within the price chart below. This trade has been very profitable, achieving a maximum positive risk reward ratio so far of more than 9 to 1 based upon the size of the entry candlestick.

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.

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