Subject: Forex Overview (August 30th) - FX Academy
 Dear Friend, Each week we like to send out our thoughts on the Forex market, not only to highlight potential trade set-ups for you to watch out for, but also to enhance your learning with some real-time market analysis. 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 11 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 August 2015 This month, we forecasted that the most likely pair to move directionally will be AUD/USD in the short direction. The performance so far has been quite positive:
Weekly Forecast 30th August 2015 Last week, we forecast that the GBP/CHF currency pair was likely to rise in value by the end of the week. In fact it fell very slightly, by only -0.30%. This week, we make no forecast, as the only suitably strong counter-trend movements were in the GBP, and we are uncomfortable going long GBP right now. The past week saw wild movements which mostly reversed completely amid a huge sell-off and fast sharp recovery in the American equity market. In such volatile conditions settled predictions become very dangerous. As at the close of the week, the relative strength of the USD has been re-established, which AUD and NZD remain very week. The CAD is generally weak but may now be strengthening due to the sharp rise in Crude Oil. This week ahead is likely to be very significant for the Forex market as the data due will probably point to either a continuation of USD strengthening as strong liquidity returns to the market, or alternatively a stall in the rise of the USD. There will also be key data due concerning the AUD and the EUR. There was a big increase in intraday volatility last week, and approximately two-thirds of the major and minor currency pairs changed in value by more than 1%. You can trade our forecasts in a real or demo Forex brokerage account.
Previous Monthly Forecasts Our forecast for July 2015 was short NZD/USD. The forecast performed positively, as shown below:
Our forecast for June 2015 was short NZD/USD. The forecast performed positively, as shown below:
Our forecast for May 2015 was long CAD/JPY. The forecast performed positively, as shown below:
Our forecast for April 2015 was short EUR/USD. The forecast performed very negatively, as shown below:
Our forecast for March 2015 was short EUR/USD. The forecast performed positively, as shown below:
Our forecast for February 2015 was long USD/CAD. The forecast did not perform positively, as shown below:
Our forecast for January 2015 was long USD/JPY. The forecast did not perform positively, as shown below:
Our forecast for December 2014 was long USD/JPY. The forecast performed positively, as shown below:
Our forecast for November 2014 was long USD/JPY. The forecast performed extremely positively, as shown below:
Our forecast for October 2014 was short EUR/USD and long USD/JPY. The forecast performed very positively, as shown below:
Earlier monthly forecasts may be seen here.
Key Support/Resistance Levels for Popular Pairs At the FX Academy, 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:
Let’s see how trading one of these key pairs last week off key support and resistance levels could have worked out:
USD/CAD We had expected the level at 1.3350 1.5689 might act as resistance, as this levels had acted previously as both support and resistance. Note how these “flipping” levels can work really well. The H4 chart below shows how at Tuesday’s New York close the price rose powerfully up to the anticipated level of resistance, before immediately reversing with a bearish inside candle which was also a doji candle that then broke to the downside, with this pattern marked at (1) in the chart, giving a potential profitable short entry. The price ended the week trying to break down past the supportive trend line. It will probably be worth holding onto at least some profit unless it becomes clear that the trend line will not be broken. This trade would have given a reward to risk ratio of approximately 5 to 1 if the stop had been set right above the high of the immediately preceding candle.
That’s all until next week. Our next newsletter will not be coming to you until Sunday 27th September. You can trade our forecasts in a real or demo Forex brokerage account.
Adam Lemon
|
|
|
