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Trading Support and Resistance – 01 May 2022

Get our trading strategies with our monthly & weekly forecast of currency pairs worth watching using support & resistance for the week of May 2, 2022.

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This week I will begin with my monthly and weekly forecasts 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:

Trading the two currencies that are trending the most strongly over the past 6 months.Trading against very strong weekly counter-trend movements by currency pairs made during the previous week.Carry Trade: Buying currencies with high interest rates and selling currencies with low interest rates.

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:

Monthly Forecast May 2022

For the month of April, I forecasted that the US Dollar Index (USDX) will rise in value. It rose by 3.19% in April, so this was a very profitable forecast.

For the month of May, again forecast that the US Dollar Index (USDX) will rise in value.

Weekly Forecast 1st May 2022

Last week, I made no weekly forecast as there were no unusually strong counter-trend price movements in the Forex market over the previous week. I again make no forecast this week.

The Forex market saw its level of directional volatility stay the same over the past week, with 44% of all the important currency pairs or crosses moving by more than 1% in value. Directional volatility is likely to increase over this coming week.

Last week was dominated by relative strength in the US Dollar, and relative weakness in the Euro and Australian and New Zealand Dollars.

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

Key Support/Resistance Levels for Popular Pairs

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 watched on the more popular currency pairs this week.

Currency Pair

Key Support / Resistance Levels

AUD/USD

Support: 0.7006, 0.6963, 0.6926, 0.6885

Resistance: 0.7183, 0.7235, 0.7275, 0.7321

EUR/USD

Support: 1.0525, 1.0444, 1.0427, 1.0372

Resistance: 1.0586, 1.0615, 1.0650, 1.0697

GBP/USD

Support: 1.2500, 1.2406, 1.2314, 1.2208

Resistance: 1.2624, 1.2698, 1.2726, 1.2772

USD/JPY

Support: 129.11, 128.59, 128.20, 127.84

Resistance: 131.50, 132.00, 132.50, 133.00

AUD/JPY

Support: 91.04, 90.52, 89.93, 89.49

Resistance: 92.78, 93.51, 94.76, 97.00

EUR/JPY

Support: 136.47, 134.35, 133.76, 133.39

Resistance: 138.26, 140.00, 140.67, 141.00

USD/CAD

Support: 1.2808, 1.2778, 1.2684, 1.2638

Resistance: 1.2901, 1.2959, 1.3025, 1.3127

USD/CHF

Support: 0.9671, 0.9633, 0.9604, 0.9515

Resistance: 0.9848, 0.9941, 1.0050, 1.0111

Let us see how trading reversals from one of last week’s key levels could have worked out:

AUD/JPY

I had expected the level at 93.51 might function as resistance, as it had previously acted as both support and resistance. Note how suchflipping” levels can be very reliable reversal points. The H1 chart below shows how the price rejected this level with a doji candlestick during the London session last Thursday, which is often a great time to enter trades in the Forex market. The entry point is marked by the down arrow within the price chart below. This trade has been very profitable, achieving a maximum positive risk reward ratio so far of more than 5 to 1 based upon the size of the entry candlestick.

AUD/JPY Hourly Chart

That is all for this week. You can trade my 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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