Subject: Forex Overview (June 4th) - 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 June 2017 Last month we forecasted that the highest-probability trades would be long GBP/USD and USD/CAD. The overall performance was negative:
This month, we forecast the highest-probability trade will be long EUR/USD.
Weekly Forecast 4th of June 2017 Last week, we forecasted that the EUR/NZD currency cross would rise in value. Unfortunately, it fell slightly, by 0.22%. This week, we make no forecast This week has been dominated by relative strength in the New Zealand Dollar and the Euro, and relative weakness in the Australian and U.S. Dollars. Volatility was lower than it was last week, with only 26% of the major and minor currency pairs changing in value by more than 1%. Volatility is likely to be greater over this coming week.
You can trade our forecasts in a real or demo Forex brokerage account.
Previous Monthly Forecasts Our forecast for April 2017 was that the best movements would be long GBP/USD and short USD/JPY. The overall performance was nicely positive: 
Our forecast for March 2017 was that the best movements would be long USD/CAD and short NZD/USD. The overall performance was positive: 
Our forecast for February 2017 was that the best movements would be long AUD/USD and NZD/USD. The overall performance was slightly negative: 
Our forecast for January 2017 was that the best movement would be short GBP/USD. The overall performance was negative: 
Our forecast for December 2016 was that the best movement would be long USD/JPY. The overall performance was positive: 
Our forecast for November 2016 was that the best movement would be long USD/CAD. The overall performance was negative: 
Our forecast for October 2016 was that the best movement would be long NZD/USD. The overall performance was negative: 
Our forecast for September 2016 was that the best movement would be long NZD/USD. The overall performance was positive: 
Our forecast for August 2016 was that the best movements would be short GBP/USD and USD/JPY. The overall performance was slightly negative: 
Our forecast for July 2016 was that that the best movements would be short GBP/USD and USD/JPY. The overall performance was positive: 
Our forecast for June 2016 was that the best movements would be short USD/JPY, and long EUR/USD. The overall performance was strongly positive: 
Our forecast for May 2016 was that the best movements would be short USD/CAD and USD/JPY, and long EUR/USD. The overall performance was strongly negative, as shown below: 
Our forecast for April 2016 was that the AUD, CAD and EUR would rise in value against the USD. The forecast performed positively overall, as shown below: 
Our forecast for March 2016 was long AUD/USD. The forecast performed very positively overall, as shown below: 
Our forecasts for February 2016 were short GBP/USD and EUR/USD, and long USD/CAD. The forecast performed slightly negatively overall, as shown below: 
Our forecasts for January 2016 were short GBP/USD and long USD/CHF and USD/CAD. The forecast performed positively, as shown below: 
Our forecasts for December 2015 were short GBP/USD and EUR/USD, and long USD/CHF. The forecast performed negatively, as shown below: 
Our forecast for November 2015 was short AUD/JPY and AUD/NZD. The forecast performed very negatively, as shown below: 
Our forecast for October 2015 was short AUD/JPY. The forecast performed negatively, as shown below: 
We made no forecast in September. Our forecast for August 2015 was short AUD/USD. The forecast performed positively, as shown below:
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:
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:
Let’s see how trading two of these key pairs last week off key support and resistance levels could have worked out: EUR/USD We had expected the level at 1.1250 might act as resistance, as it had acted previously as both support and resistance. Note how these “flipping” levels can work well. The H1 chart below shows the how the price initially hit this level and formed a bearish outside candle during the New York session last Wednesday. This could have provided a short trade entry, marked by the first down arrow towards the left in the chart below, but would have been stopped out a few hours later. There was another entry opportunity during the subsequent Asian session when the price again rejected the level with a bearish pin candle providing a better entry, marked by the second down arrow shown in the chart. This short trade gave an acceptable reward to risk ratio of approximately 2 to 1, if the stop had been placed just above the swing high at the entry candlestick. 
GBP/USD We had expected the level at 1.2722 might act as support, as it had 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 this level and formed a bullish engulfing candle early in the London session last Wednesday, which is typically a productive time of day to trade this pair. This provided a long trade entry, marked by the up arrow shown in the chart below. This long trade has so far given an excellent reward to risk ratio of more than 2 to 1 so far, if the stop had been placed just below the swing low at the entry candlestick. 
That’s all for now. Our next newsletter will be coming to you next week, on Sunday 11th June. You can trade our forecasts in a real or demo Forex brokerage account.
Adam Lemon |
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