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. This week, I again make no forecast.

This week I will begin with my monthly and weekly Forex forecast 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:

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 August 2022

For the month of August, I forecasted that the EUR/USD currency pair would decline in value. The result so far is shown below:

Weekly Forecast 28^th August 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. This week, I again make no forecast.

The Forex market saw a strong decrease in directional volatility last week, with only one of all the important currency pairs or crosses moving by more than 1% in value. Directional volatility is likely to be higher over this coming week as there are a few major releases due, and the impact of Powel’s speech last Friday is likely to continue to drive markets as this week opens.

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

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.

Let us 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 $1.0070 might act as resistance in the EUR/USD currency pair last week, as it had acted previously as both support and resistance. Note how these “role reversal” levels can work well. The H1 price chart below shows how the price rejected this level following Jerome Powell’s hawkish speech near the start of last Friday’s New York session with a large bearish outside candlestick, marked by the down arrow signaling the timing of the bullish bounce. This is typically a great time of day to be entering trades in major Forex currency pairs. This trade has been profitable, but has achieved a maximum positive reward to risk ratio of less than 1 to 1 so far based upon the size of the entry candlestick.

GBP/USD

We had expected the level at $1.1878 might act as resistance in the GBP/USD currency pair last week, as it had acted previously as both support and resistance. Note how these “role reversal” levels can work well. The H1 price chart below shows how the price rejected this level following Jerome Powell’s hawkish speech near the start of last Friday’s New York session with a large bearish outside candlestick, marked by the down arrow signaling the timing of the bullish bounce. This is typically a great time of day to be entering trades in major Forex currency pairs. This trade has been profitable but has achieved a maximum positive reward to risk ratio of less than 1 to 1 so far based upon the size of the entry candlestick.

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The chance of the lira rising against the dollar is still weak, as the pair is heading in a general bullish direction in general.

Today’s recommendation on the lira against the dollar

•  Risk 0.50%.
• Yesterday’s buy deal was activated, and a profit was exited with closing half of the contracts and moving the stop loss point with the price movement

Best selling entry points

Entering a short position with a pending order from levels of 18.33

• Set a stop-loss point to close the lowest support levels at 18.55.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the strong resistance levels at 17.70.

Best entry points buy

Entering a long position with a pending order from 17.98 levels

• The best points for setting stop-loss are closing the highest levels of 17.74.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.

Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the support levels 18.31

Analysis of the Turkish lira

The USD/TRY has stabilized at its lowest levels during the current year, as investors followed the statements made by Turkish President Recep Tayyip Erdogan, whose purpose was to provide some reassurance. The Turkish President said that the Turkish government will face the high cost of living starting from the first months of 2023. He also expressed his regret over the high inflation figures as he called for the impact of this inflation on the economy, explaining that the country does not need to raise the interest rate as the country does not need hot money. He also called on citizens to trust his economic model. With these statements, the Turkish president, who has effective control over the Central Bank of Turkey, cut off any hope of tightening monetary policy in the country. This means that the bank’s next steps will be limited to stabilizing or reducing interest rates. Which reflects the continuing pressures on the price of the lira during the coming period.

Turkish Lira Technical Analysis

The US dollar pair against the Turkish lira traded near its highest levels during 2022, as the pair returned to trading in a narrow trading range, which is shown on the chart. The pair is also trading above the moving averages 50, 100 and 200, respectively, on the four-hour time frame as well as on the 60-minute time frame, indicating the long-term bullish trend. The pair traded the highest support levels, which are concentrated at 18.08 and 17.98 levels, respectively. While the lira is trading below the resistance levels at 18.16 and 18.33, respectively. The chance of the lira rising against the dollar is still weak, as the pair is heading in a general bullish direction in general. As each decline of the pair represents a good buying opportunity, please adhere to the numbers in the recommendation, with the need to maintain capital management.

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Today’s recommendation on the lira against the dollar

Risk 0.50%.

None of the buy or sell transactions of yesterday were activated

Best selling entry points

• Entering a short position with a pending order from levels of 18.33
• Set a stop-loss point to close the lowest support levels at 18.55.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the strong resistance levels at 17.70.

Best entry points buy

• Entering a buy position with a pending order from levels of 17.85
• The best points for setting stop-loss are closing the highest levels of 17.54.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the support levels 18.31

USD/TRY Technical Analysis

The lira stabilized without changes in the price of the USD/TRY currency pair as the pair is trading within a very narrow range. This is amid the absence of influential data from inside Turkey during the day, as well as the clear interference by the Central Bank of Turkey to control the price of the dollar against the lira. Investors followed reports on the Russian-Turkish consensus on the adoption of the local currency in the trade exchange between the two countries. The two sides agreed to pay part of Turkey’s natural gas imports in Russian rubles, which may contradict a series of Western sanctions against Moscow. In the same context, a report from the American Newsweek magazine stated that the percentage of Turkish real estate sales to Russian citizens increased during the current year, so that the Russians topped the purchases of real estate in Turkey before the Iranians and Iraqis. It is noting the lack of significant economic impact, especially amid the country’s suffering of inflation levels that have not been recorded for nearly 25 years.

The economic situation is not expected to improve significantly in light of the Turkish Central Bank’s adherence to a stimulus policy in exchange for monetary tightening in the United States, which raises the value of the dollar.

Turkish Lira Technical Analysis

The US dollar against the Turkish lira settled within the same narrow trading range shown on the chart. The pair traded the highest levels of support, which are concentrated at the levels of 17.85 and 17.75, respectively. While the lira is trading below the resistance levels at 18.00 and 18.07, respectively. The pair is also trading above the 50, 100 and 200 moving averages, respectively, on the four-hour time frame as well as on the 60-minute time frame, indicating the long-term bullish trend. The chance of the lira rising against the dollar is still slim as the pair is heading in an overall bullish trend. As each decline of the pair represents a good buying opportunity, please adhere to the numbers in the recommendation, with the need to maintain capital management.

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It’s all short-term trading at this point, so you need to be cautious about overstaying your welcome.

• The EUR/USD currency pair went back and forth Tuesday as nobody really knows what to do with themselves at this point.
• Ultimately, this is a market that continues to see a lot of volatility, but you should also pay close attention to the fact that we have been stuck in a range.
• Because of this, it’s possible that we will continue to see that be the case, so you will have to look at the short-term charts more than anything else.

EUR/USD Technical Analysis

The 1.01 level underneath is a significant support level on short-term charts, as we have seen a lot of buying pressure in that general vicinity. The market has broken through there previously but found the parity level to be far too supportive to break down below it. On the other hand, the 1.03 level has been important previously as resistance, and of course, we have even more importance on the 1.04 level as it has a lot of “market memory” attached to it.

The 1.04 level has previously been supported previously, so now it should be resistance. You’ll notice that I have it marked on the chart, and it should be an area of extreme difficulty digging above. Even if we break above there, the 1.06 level needs to be broken above in order to change the overall trend. I don’t see that happening anytime soon, mainly due to the fact that the European Union has a whole host and litany of problems, not the least of which will be energy supply.

That being said, in the short term I think we probably do bounce because the market does not look like it’s ready to completely break down. Watch interest rates in the United States, because if they start to spike again, that might be reason enough to send this market much lower. On the other hand, if they start to fall, that might give a little bit of a reprieve to the euro, at least for the short term. The 50-day EMA also has offered a significant amount of technical resistance a couple of times, so that is something worth paying attention to. Either way, it’s all short-term trading at this point, so you need to be cautious about overstaying your welcome.

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Get our trading strategies with our monthly & weekly forecast of currency pairs worth watching using support & resistance for the week of August 15, 2022.

This week I will begin with my monthly and weekly Forex forecast 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:

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:

Currency Price Changes and Interest Rates

Monthly Forecast August 2022

For the month of August, I forecasted that the EUR/USD currency pair would decline in value. The result so far is shown below:

 

 

Monthly Forex Forecast Performance

Weekly Forecast 14^th August 2022

This week, I forecast that the NZD/USD currency pair will fall in value over the week, as it made a strong counter-trend price movement last week.

The Forex market saw a much higher level of directional volatility last week, with 59% of all the important currency pairs or crosses moving by more than 1% in value. Directional volatility is likely to be at least a little lower over this coming week as although there are some key news releases scheduled, we are unlikely to see anything with as strong an impact on the market as last week’s US CPI data release.

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

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.

Let’s see how trading one of these key pairs last week off key support and resistance levels could have worked out:

AUD/JPY

We had expected the level at 93.24 might act as support, as it had acted previously as both support and resistance. Note how these “role reversal” levels can work well. The H1 chart below shows how the price broke above this level right at the the start of last Monday’s Asian session, and then tested it and rejected it from above with an engulfing candlestick marked by the up arrow signaling the timing of the bullish bounce. This trade has been very profitable, achieving a maximum positive reward to risk ratio of more than 3 to 1 so far based upon the size of the entry candlestick structure.

AUD/JPY Hourly Price Chart

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The EUR/GBP has climbed in early trading this morning, this after finding a groundswell of support yesterday via technical interpretations.

As of this writing the EUR/GBP is trading near the 0.84500 mark with natural gyrations effectively being demonstrated.  The EUR/GBP has traded near lows of 0.84300 earlier today; yesterday’s low for the EUR/GBP currency pair touched approximately the 0.84170 ratio. The active price of the EUR/GBP is now challenging higher marks seen yesterday before the Forex pair stumbled to its lows.

Technical Traders have Reasons to be intrigued by the EUR/GBP

As much as I favor looking at fundamentals and making them part of trading decisions, technical traders of the EUR/GBP have a strong argument that this currency pair moves more according to behavioral sentiment generated by technical perspectives. Long term speculators of the EUR/GBP can look at charts going back many years, and see rather interesting graphical evidence of trends and cycles within. Currently the EUR/GBP is still trading in what can be considered lower depths if a timetable from July of 2016 until now is considered with a range of 0.83000 to 0.90000 getting most of the price action with the occasional outliers.

After Lows of Last Week Touched, the EUR/GBP has Moved Incrementally Higher

Lows of nearly 0.83400 were touched on the 2^nd and 3^rd of August, these marks had last been seen in April this year.  Although there has not been a volatile burst of energy upwards in the past week, encouragingly perhaps for bullish speculators is the notion that incrementally the EUR/GBP appears to be moving upwards.

If the EUR/GBP in the short term can sustain value over the 0.84500 level this could spur on additional buying which believes ‘real’ equilibrium for the currency pair should be higher. While the USD and Federal Reserve drive financial houses crazy as the central bank’s outlook tries to be interpreted. The EUR/GBP exists in a ‘happy place’ somewhat apart from the fixation of the U.S Fed. The EUR/GBP certainly is affected by the BoE and ECB, but both of these central banks have complicated moving parts which are eerily similar regarding their challenges.

• If the EUR/GBP continues to foster support near the 0.84500 level, the currency pair may have a thrust higher to attain near term.
• Technically the EUR/GBP could be perceived as ready to target higher realms seen only yesterday near the 084700 to 0.84850 vicinities.

Traders as always should be cautious and use their risk taking tactics wisely. Speculators should not be overly ambitious because the EUR/GBP has proven to be rather range bound in recent trading, but the notion that upside momentum will occur for the EUR/GBP technically appears appealing for a wager.

EUR/GBP Short-Term Outlook

Current Resistance: 0.84560

Current Support: 0.84270

High Target: 0.84950

Low Target: 0.84004

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If we do get a rally from here, the first signs of exhaustion will more likely than not be a nice selling opportunity.

• The West Texas Intermediate Crude Oil market pulled back a bit on Tuesday after rallying.
• This shows just how noisy this market is, and it suggests that we are still going to struggle to go higher over the longer term.
• After all, this is a market that has been drifting for a while to the downside, and now it looks like we are continuing to see plenty of bearish pressure.

Dropping Demand Affects Oil Markets

The crude oil markets have been suffering at the hands of concern about recessionary concerns, and therefore demand dropping. After all, if global economies are going to start slowing down, then the demand for crude oil will drop. This is especially pertinent due to the fact that OPEC had very little to say when it came to increasing production, and prices still continued to drop.

The candlestick is a neutral candlestick, so it does suggest that we have a lot of confusion, so I think we are going to continue to be cautious about putting too much into the market at any moment. I believe that the 200-day EMA above could offer dynamic resistance, somewhere near the $26 level. If we were to break above the 200-day EMA, the market is likely to go looking to the $100 level after that. The $100 level has a lot of psychology attached to it, so I think you would see new sellers coming back into the marketplace.

On the other hand, if we were to break down below the $87 level, then it’s likely that the market will drop down to the $80 level. In general, I think it’s likely that we go down to the $80 level, especially if the Federal Reserve has to tighten its monetary policy due to massive amounts of inflation. The CPI figures coming out on Wednesday will almost certainly give us an idea as to whether or not the Federal Reserve has to tighten monetary policy, which of course will strengthen the US dollar overall. In general, I think that’s probably what we are going to be looking at over the next 24 hours. I do not have an interest in buying crude oil, and I think that if we do get a rally from here, the first signs of exhaustion will more likely than not be a nice selling opportunity.

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Today’s recommendation on the lira against the dollar

Risk 0.50%.

The purchase transaction on Thursday was activated and a profit was exited after closing half of the contracts and moving the stop loss point to the entry point

Best selling entry points

• Entering a short position with a pending order from levels of 18.33
• Set a stop-loss point to close the lowest support levels at 18.55.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the strong resistance levels at 17.70.

Best entry points buy

• Entering a buy position with a pending order from levels of 17.85
• The best points for setting stop-loss are closing the highest levels of 17.54.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the support levels 18.31

Analysis of the Turkish lira

The Turkish lira stabilized against the dollar during Monday morning trading, without major changes, as it appears that the Turkish Central Bank intervened to maintain the price of the lira at the current borders. Inflation expectations witnessed increases than previous expectations. There are no positive developments on the economic front that might push the price of the lira higher. During the past week, investors followed the Turkish president’s meeting with the Russian president, where Putin thanked Turkey for continuing to be a good trading partner, noting that the volume of trade between Moscow and Ankara doubled in the period from January to May of 2022. They also agreed on Friday that it will start Ankara made payments for natural gas to Moscow in rubles. This may ease the pressure on the lira slightly, especially since energy imports into the country have pushed inflation to rise dramatically. The lira is not expected to lead to a significant improvement in light of the monetary stimulus that the Turkish Central Bank is sticking to.

On the technical front, the Turkish lira stabilized against the US dollar, after the USD/TRY currency pair recorded a new high last week at 18.07 levels. In general, the pair’s movement continued within a narrow trading range, with the same trading pattern that the pair has been following since last week. The lira traded around the highest recorded during the current year. The pair is trading above the 50, 100 and 200 moving averages, respectively, on the four-hour time frame as well as on the 60-minute time frame, indicating the long-term bullish trend. At the same time, the pair is trading the highest levels of support, which are concentrated at 17.90 and 17.85 levels, respectively. The lira is trading below the resistance levels at 18.00 and 18.07, respectively. We expect to re-record new highs, especially with every dip in the pair, which represents a buying opportunity. Please adhere to the numbers in the recommendation with the need to maintain capital management.

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Get our trading strategies with our monthly & weekly forecast of currency pairs worth watching using support & resistance for the week of August 8, 2022.

This week I will begin with my monthly and weekly Forex forecast 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:

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:

Currency Price Changes and Interest Rates

Monthly Forecast August 2022

For the month of July, I forecasted that the EUR/USD currency pair and the GBP/USD currency pair would both decline in value. The result was nicely profitable:

Monthly Forex Forecast Performance

For the month of August, I forecast that the EUR/USD currency pair will decline in value.

Weekly Forecast 7^th August 2022

I make no weekly forecast as last week saw no major counter-trend price movements over the week.

The Forex market saw a low level of directional volatility last week, with only 11% 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 as there will be a release of very crucial US CPI data on Wednesday. However, it is worth noting that we are well into the month of August, which typically sees low levels and volatility and activity in the Forex market anway.

Last week was dominated by relative strength in the US Dollar, and relative weakness in the Japanese Yen.

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.

Key Support and Resistance Levels

Ready to trade our Forex weekly analysis? We have shortlisted the best Forex trading brokers in the industry for you.

Today’s recommendation on the lira against the dollar

Risk 0.50%.

Yesterday’s buy trade was activated, and half of the contracts were closed with the price rising towards the target and providing a stop loss point.

Best selling entry points

• Entering a short position with a pending order from levels of 18.33
• Set a stop-loss point to close the lowest support levels at 18.55.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the strong resistance levels at 17.70.

Best entry points buy

• Entering a buy position with a pending order from levels of 17.85
• The best points for setting stop-loss are closing the highest levels of 17.54.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the support levels 18.31

Analysis of the Turkish lira

The price of the lira stabilized during today’s trading at the same levels as yesterday, after a repeated rise of the lira against the dollar, before losing those gains. The strong movement that the pair records repeatedly is reflected in an intervention by the Central Bank of Turkey in the market, which aims to stabilize the lira and prevent further losses. It does not seem that the economic conditions in the country are encouraging to record any kind of improvement in the price of the lira, with mounting criticism of the monetary policy pursued by the Turkish Central Bank. The latest criticism was from the head of the Istanbul Chamber of Industry, who said that the Turkish Central Bank severely restricts the credit granted to companies that are not even classified as major exporting companies. Analysts attributed this restriction to the decline in the size of the financial reserve of foreign currencies, which suffers from a lack of tools available to it to add any solutions to control the decline of the lira, especially in light of the high inflation, and adherence to a stimulus monetary policy.

On the technical front, the Turkish lira against the US dollar followed the same trading pattern that the pair has been following since last week. The lira stabilized at the peak recorded during the current year, after a temporary decline during yesterday’s trading. The intervention of the Turkish Central Bank in the strong movements of the pair appears on the pullbacks shown on the chart, before the pair’s rise returns. The pair is trading above the moving averages 50, 100 and 200 respectively on the four-hour time frame as well as on the 60-minute time frame, indicating the bullish trend on the medium term. The pair is also trading above the rising trend line on the four-hour time frame, shown on the chart, at the same time, the pair is trading the highest support levels that are concentrated at 17.80 and 17.70 levels, respectively. While the lira is trading below the resistance levels at 18.00 and 18.32, respectively. We expect to re-record new highs, especially with every dip in the pair, which represents a buying opportunity. Please adhere to the numbers in the recommendation with the need to maintain capital management.

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