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:
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 May 2018
For the month of May, we forecast that the best trade would be long USD/SEK. The performance to date is as follows:
Weekly Forecast 13th May 2018
Last week, we made no forecast, as there were no strong counter-trend movements. This week, we forecast that the SEK/JPY currency cross will fall in value, as there was a strong counter-trend rise in its value last week.
This week has been dominated by relative strength in the Canadian Dollar, and relative weakness in the New Zealand Dollar.
Volatility was much less than it was last week, with approximately 7% of the major or minor currency pairs changing in value by more than 1%. Volatility is likely to be at a similar level next week.
Previous Monthly Forecasts
You can view the results of our previous monthly forecasts here.
Key Support/Resistance Levels for Popular Pairs
We 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 should be watched on the more popular currency pairs this week, which might result in either reversals or breakouts:
