Market Analysis for Week of 15 March 2015
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:
- Trading the two currencies that are trending the most strongly over the past 3 months.
- Assuming that trends are usually ready to reverse after 12 months.
- Trading against very strong counter-trend movements by currency pairs made during the previous week.
- Buying currencies with high interest rates and selling currencies with low interest rates.
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 March 2014
We forecasted that the pair most likely to change in value significantly during the month of March would be EUR/USD. This pair has been the strongest mover over the previous 3 months, with the exception of the CHF. Recent strong moves in the CHF have looked abnormal and suspicious, therefore we refrained from forecasting a fall in EUR/CHF.
The monthly forecast has performed to date as follows:
Weekly Forecast 15th March 2015
There was no weekly forecast last week. This week we make no forecast as there were no strong counter-trend moves in the market at all.
This week saw a fairly strong reassertion of the bullish USD trend, and a continuing question mark against any more strength in the GBP for the time being. This leaves the USD as the only reliably strong currency. The EUR looks to be by far the weakest currency, followed by the CAD.
The market continues to remain strongly focused on the falling EUR/USD. The fall here has been exceptionally strong and fast and still shows no sign of halting.
There was a small decrease in volatility this week, with only just over half of the major and minor currency pairs fluctuating in value by more than 1%.
You can trade our forecasts in a real or demo Forex brokerage account.
Previous Monthly Forecasts
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:
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:
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