Trading Support and Resistance – 20 March 2022
Get our trading strategies with our monthly & weekly forecast of currency pairs worth watching using support & resistance for the week of March 21, 2022.
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 March 2022
For the month of March, I forecasted last week that the EUR/USD currency pair would fall in value. Its performance to dates shown below.
Interest Rate Differential
Performance to Date
+0.50% (0.50% – 0.00%)
Weekly Forecast 20th March 2022
Last week I forecasted that the GBP/SEK currency cross will be likely to rise in value. Unfortunately, it fell in value by 2.39%.
This week, I forecast that the EUR/SEK currency cross will be likely to rise in value.
The Forex market saw its level of directional volatility increase slightly last week, with 56% of all the important currency pairs or crosses moving by more than 1% in value. Directional volatility is likely to fall at least a little over this coming week, as markets seem to have shifted into a more risk-on mode, and because there are fewer high-impact data releases scheduled.
Last week was dominated by relative strength in the Australian Dollar, and relative weakness in the Japanese Yen.
You can trade our 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.
Key Support / Resistance Levels
Support: 0.7405, 0.7321, 0.7275, 0.7200
Resistance: 0.7430, 0.7439, 0.7454, 0.7513
Support: 1.0956, 1.0710, 1.0639, 1.0615
Resistance: 1.1072, 1.1142, 1.1241, 1.1272
Support: 1.3079, 1.3005, 1.2785, 1.2650
Resistance: 1.3273, 1.3316, 1.3357, 1.3458
Support: 119.12, 119.00, 118.37, 118.10
Resistance: 119.04, 119.12, 119.60, 120.00
Support: 87.69, 86.55, 86.19, 85.80
Resistance: 88.43, 89.49, 89.69, 90.49
Support: 131.22, 130.58, 130.23, 130.00
Resistance: 131.91, 132.35, 133.63, 134.16
Support: 1.2535, 1.2498, 1.2372, 1.2250
Resistance: 1.2654, 1.2675, 1.2753, 1.2778
Support: 0.9286, 0.9236, 0.9072, 0.9000
Resistance: 0.9333, 0.9372, 0.9381, 0.9438
Let us see how trading reversals from two of last week’s key levels could have worked out:
I had expected the level at 84.61 might function 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 how the price rejected this level with a pin bar at the start of last Tuesday’s London session (typically a great time to enter trades in the Forex), marked by the up arrow in the price chart below. This trade has been extremely profitable, achieving a maximum positive risk reward ratio of more than 11 to 1 based upon the size of the entry candlestick.
I had expected the level at 0.9438 might function 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 how the price rejected this level with a large pin bar during last Wednesday’s New York session, marked by the down arrow in the price chart below. This trade has been profitable, achieving a maximum positive risk reward ratio of more than 2 to 1 based upon the size of the entry candlestick.
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.