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The
Currency Score analysis is one of the parameters used for the
Ranking and Rating list which was published earlier this weekend.
Besides this analysis and the corresponding chart I also provide the
weekly analysis on my strategy
and the Forex ranking and rating list which is available 3 times a week
on this blog.
It is recommended to read the page Currency score explained and Models in practice for a better understanding of the article. This article will provide my analysis on the 8 major currencies based on the technical analysis charts using the MACD and Ichimoku indicator on 4 time frames, the monthly, weekly, daily and 4 hours. The result of the technical analysis are the 2 screenshots in this article showing the Currency Score and the Currency Score Difference.
The conclusion is:
According to the Ranking and Rating list already published this weekend
the following pair combinations look interesting.
The technical analysis is the most important issue to consider
before taking positions. The Weekly Chart is being analyzed. I prefer
the Bollinger Band for defining where a pair is in the chart. Once a
pair is outside a Bollinger Band it is in a strong trend which can
cause a strong pullback. Although this may be a good opportunity for
other analysts I avoid taking positions because of the possible
unexpected strong pullback. Positions are only opened inside the
Bollinger Band and this may be at the start of a possible trend or on a
good pullback in an existing trend.
When trading according to the FxTaTrader Strategy some rules are in place. For more information see the page on my blog FxTaTrader Strategy. Depending on the opportunities that may come up the decision to trade a currency may become more obvious at that moment.
DISCLAIMER: The
articles are my personal opinion, not recommendations, FX trading is
risky and not suitable for everyone.The content is for educational
purposes only and is aimed solely for the use by ‘experienced’ traders
in the FOREX market as the contents are intended to be understood by
professional users who are fully aware of the inherent risks in forex
trading. The content is for 'Forex Trading Journal' purpose only.
Nothing should be construed as recommendation to purchase any financial
instruments. The choice and risk is always yours. Thank you.
It is recommended to read the page Currency score explained and Models in practice for a better understanding of the article. This article will provide my analysis on the 8 major currencies based on the technical analysis charts using the MACD and Ichimoku indicator on 4 time frames, the monthly, weekly, daily and 4 hours. The result of the technical analysis are the 2 screenshots in this article showing the Currency Score and the Currency Score Difference.
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Last 3 months currency classification
The last 3 months currency
classifications from a longer term
perspective
are provided for reference
purposes. The necessary charts can be found in the previous
article Weekly Currency Score Wk11.
The
currencies are
classified for the coming weeks as follows:
- Strong: USD / NZD / GBP. The preferred range is from 6 to 8.
- Average: CAD / CHF / JPY. The preferred range is from 3 to 5.
- Weak: EUR / AUD. The preferred range is from 1 to 2.
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Currency Score
For analyzing the best pairs to trade this classification is the first issue. When looking at the most recent score that is used for the coming period we can see in the screenshot below that the CAD is having a score of 6, the GBP a score of 2 and the AUD a score of 3. A strong currency (GBP) should have by preference a score of 6 or higher and an average currency (CAD) a score from 3 to 5. The AUD is having a score of 3 while it is a weak currency, it is 1 point higher than the preferred range.The conclusion is:
- Most of the currencies are at the right level except for the the GBP, CAD and AUD.
- There is a strong pullback at the moment for the GBP when looking at the market as a whole.
- There is a light pullback for the AUD when looking at the market as a whole.
- There is an increase of momentum for the CAD which is getting stronger.
- The pairs that we may look at are all most
probably trending except for the pairs with the GBP and AUD
which are
most probably ranging.
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Currency
Score difference
- EUR/USD with the GBP/NZD
- GBP/USD with the EUR/CAD
- EUR/NZD with the GBP/USD
- EUR/CAD with the GBP/NZD
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- The EUR/USD is in a downtrend and within the Bollinger Band.
- The GBP/NZD is in short term downtrend and in a weak longer term downtrend and within the Bollinger Band.
- The GBP/USD is in a downtrend and at the Bollinger Band.
- The EUR/CAD is in a downtrend and slightly outside the Bollinger Band. This will most probably not be the case when the trading week starts and the new indicator values are calculated.
- The EUR/NZD is in a downtrend and within the Bollinger Band.
When trading according to the FxTaTrader Strategy some rules are in place. For more information see the page on my blog FxTaTrader Strategy. Depending on the opportunities that may come up the decision to trade a currency may become more obvious at that moment.
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