Trading Support & Resistance  – 25 March 2018

Trading Support & Resistance – 25 March 2018

By: DailyForex

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:

Interest Rate

Monthly Forecast March 2018

For the month of March, we forecasted that the best trades would be short USD/JPY and long EUR/USD. The performance to date is as follows:

Currency Pair

Forecast Direction

Interest Rate Differential

Performance to Date

EUR/USD

Long ↑

-1.75% (0.00% – 1.75%)

1.31%

USD/JPY

Short ↓

-1.85% (-0.10% – 1.75%)

1.83%

Weekly Forecast 25th March 2018 

Last week, we made no weekly forecast, as there were no strong counter-trend movements that week.

This week, we make no weekly forecast, as there were again no strong counter-trend movements.

This week has been dominated by relative strength in the Canadian Dollar, and relative weakness in the U.S. Dollar.

Volatility was the same as it was last week, with approximately 41% of the major or minor currency pairs changing in value by more than 1%. Volatility is likely to be lower next week.

You can trade our forecasts in a real or demo Forex brokerage account.

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:

Currency Pair

Key Support / Resistance Levels

AUD/USD

Support: 0.7640, 0.7629, 0.7598, 0.7577

Resistance: 0.7738, 0.7775, 0.7804, 0.7851

EUR/USD

Support: 1.2322, 1.2296, 1.2005, 1.1885

Resistance: 1.2385, 1.2436, 1.2459, 1.2500

GBP/USD

Support: 1.4043, 1.3983, 1.3879, 1.3822

Resistance: 1.4168, 1.4330, 1.4435, 1.4514

USD/JPY

Support: 103.34, 100.03, 98.86, 97.61

Resistance: 105.27, 105.90, 106.10, 106.75

AUD/JPY

Support: 80.31, 79.84, 79.21, 79.14

Resistance: 82.70, 83.26, 83.60, 84.85

EUR/JPY

Support: 129.12, 128.40, 127.44, 126.48

Resistance: 130.61, 131.00, 131.87, 134.16

USD/CAD

Support: 1.2785, 1.2732, 1.2669, 1.2605

Resistance: 1.2946, 1.2971, 1.3053, 1.3200

USD/CHF

Support: 0.9423, 0.9327, 0.9318, 0.9264

Resistance: 0.9522, 0.9574, 0.9665, 0.9732

Let’s see how trading one of these key pairs last week off key support and resistance levels could have worked out:

GBP/USD

We had expected the level at 1.4168 might act as resistance, as it has acted previously as both support and resistance. Note how these “flipping” levels can work well. The H1 chart below shows the how the price hit the resistance level at 1.4168 and bounced bearishly right away at the down arrow when the FOMC rate hike and statement were released, which is often an effective time enter Forex trades. A possible entry was signaled initially by the large outside candlestick, marked by the down arrow within the chart below. Taking entries after very large candles can be somewhat problematic, as it narrows the reward to risk ratio on potential profit, but the price moved quickly into profit before pulling back. The trade would still be open.  

GBP/USD

You can trade our 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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