Subject: Forex Overview (January 11th) - 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 January 2014 We forecasted that the pair most likely to change in value significantly during the month of January was the USD/JPY. This pair had been the strongest mover in the market over the previous 3 month and 6 month periods.
Weekly Forecast 11th January 2015 Average volatility this week was somewhat higher than last week. Just over half of the major and minor pairs fluctuated in value by more than 1%. We forecast that this week, EURJPY, GBPJPY and CHFJPY are all likely to rise in value, as they all suffered especially strong counter-trend movements. As this movement is driven mainly by the JPY, and the other currencies are currently quite closely correlated, it would be wise to treat such a trade as a weighted basket. The big picture this week shows a continuation of the established long-term strong USD trend, but this is overshadowed by a greater strengthening of JPY. Looking at the longer-term trend, the NZD is almost as strong no as the USD, and is close to overtaking it as the strongest currency. The EUR, CHF and CAD remain weak, although the AUD is strengthening against its longer-term trend. You can trade our forecasts in a real or demo Forex brokerage account. Previous Monthly Forecasts Our forecast for November 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:
That’s all until next week. Our next newsletter will be coming to you on Sunday 18th January. You can trade our forecasts in a real or demo Forex brokerage account. Adam Lemon
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