Forex Brokers We Recommend in Your Region
This week I will begin with my monthly and weekly Forex forecast 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:
For the month of December, I made no forecast, as although the US Dollar was making long-term lows, the move was over-extended at the start of the month so was liable to retrace. This was probably a good call, as Dollar direction has been volatile so far this month.
Last week, I made no weekly forecast, as there were no unusually strong counter trend price movements.
This week, I again make no forecast as there were no unusually strong counter trend price movements in the Forex market.
Directional volatility in the Forex market decreased last week with 30% of the most important currency pairs fluctuating over the week by more than 1%. Volatility is likely to decrease even further over the coming week, as there are fewer high-impact data releases scheduled.
Last week was dominated by relative strength in the Japanese Yen, and relative weakness in the US Dollar.
You can trade my forecasts in a real or demo Forex brokerage account.
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 monitored on the more popular currency pairs this week.
Let us see how trading one of these key pairs last week off key support and resistance levels could have worked out:
I had expected the level at $1.2507 might act as support in the GBP/USD currency pair last week, as it had acted previously as both support and resistance. Note how these “role reversal” levels can work well. The H1 price chart below shows how the price rejected this level right at the end of last Wednesday’s London session (which can be a good time to enter trades in this currency pair) with a small bullish doji candlestick, marked by the up arrow in the price chart below signaling the timing of this bullish rejection. This trade has been extremely profitable so far, giving a maximum reward to risk ratio of more than 14 to 1 based upon the size of the entry candlestick.
Ready to trade our weekly Forex analysis? We’ve made a list of the best brokers to trade Forex worth using.
