FxTaTrader


Forex Technical Analysis based on experience and research.

Sunday, August 13, 2017

Forex Strength and Comparison Week 33 / 2017

In the Currency Strength table, the EUR was the strongest currency while the GBP was the weakest. There were some significant changes last week with the CHF gaining 3 points and the JPY 2 points, the NZD lost 3 points. The other currencies remained around the same level of last week with a maximum change in the strength of just 1 point.

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 13 Weeks Currency Score Strength

The 13 Weeks Currency Strength and the 13 Weeks Average are provided here below. This data and the "13 weeks Currency Classification" are considered for deciding on the preferred range. Because it is not ideal nor desired to change the range for a currency every single week, we perform several checks to avoid this.
  1. First of all the strength over a period of the last 13 weeks is considered. See each row for more information.
  2. Next, the 13 weeks average is considered, see the last row called "Avg. 13 wks."
  3. The number of weeks that a currency was stronger than another currency can also be considered.
  4. The Technical Analysis (TA) Charts for each Time Frame could also be consulted.



For analyzing the best pairs to trade looking from a longer-term perspective the last 13 weeks Currency Classification can be used in support.
This was updated on 06 August 2017 and is provided here for reference purposes:
Strong: EUR and NZD. The preferred range is from 7 to 8.
Neutral: AUD, CAD and CHF. The preferred range is 4 to 6.
Weak: USD, JPY, GBP. The preferred range is from 1 to 3.

When looking at the Average 13 wks. Score we can see the currencies grouped together according to their classification. There may be some doubt and in that case it may be a currency that can change of classification in the coming weeks.
  • Strong - We can see that the EUR and the NZD are clearly grouped together as Strong currencies around an Average 13 wks. Score of 6.
  • Neutral - The AUD, CHF and CAD are grouped together around an Average 13 wks. Score of 5.
  • Weak - The USD, JPY and GBP are grouped together being all Weak currencies around an Average 13 wks. Score of 3.
From the Weak currencies we can see that the JPY is the strongest. This is also because of the high Score of 7 last week. The JPY is still far from the Neutral currencies but if it remains strong it may become one in the coming weeks.



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Classification review

This week we take a look at the Weak currencies. As can be seen in the chart the JPY gained a lot of strength in the last 3 weeks.This may be temporary and the Average 13 wks. Score is still too low for this currency to be classified as a Neutral or Strong currency. However, the Score of 7 last week is the highest in the last 13 weeks and if it continues to remain this strong it may become a Neutral currency in the coming weeks.
The USD and GBP are clearly remaining both very weak with the USD being slightly stronger. It looked a few weeks ago like the GBP was trying to find the way up but with the highest Score of 5, which was 7 weeks ago, the currency is back to the lower range in the last weeks.Below you can see the Weekly Currency Score Chart with the 6 months' data as a reference.



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Currency Score Comparison

 "Comparison table" and the "Ranking and Rating list"

The Forex Currency Comparison Table compares each currency with its counterpart based on the Currency Score. For more information about the currency Score of this week, you can read the article "Forex Ranking, Rating and Score" which is published every week together with this article.
By using the comparison table directly below you can get a view without the volatility and statistics as opposed to the "Ranking and Rating list". Only the strength of each currency against the counterparts is analyzed by using the Technical analysis charts of the 4 Time Frames that are also used for the "Ranking and Rating List".
The information from the Comparison Table is the source for calculating the "Ranking and Rating List" where this list additionally uses the volatility and statistics for creating the best and worst performer in the list from number 1 to 28.

The information is published once a week and be aware that rates change during this period. The mentioned scores also change and different opportunities may show up. There are many ways to follow the rate changes. This can be done e.g. by looking at the charts and checking e.g. the Ichimoku and/or MACD in the Weekly and Daily chart. There are also many tools, apps and websites where the movement of trading rates of currencies is shown in different automated ways. This may be in pips or through percentage differences or by comparing the values of indicators like the RSI, Moving Averages, MACD, Ichimoku etc. On my blog a Heatmap is available that can be of use also.






"Comparison table" and the "Currency Score Chart"

The additional value of this table compared to the Currency Score table is that the Comparison Table compares the strength between the currencies of each pair. By subtracting the strength of the weaker currency from the stronger currency we have a way to compare each pair combination.
The comparison table provides a way to compare currencies from a longer-term perspective of 13 weeks and also simultaneously taking the current trend into account. By coloring the currencies in the X and Y axis according to their Classification we can show what the best combinations are.


Comparison table Guide
  1. First of all better-classified currencies in combination with weaker-classified currencies can always be traded and vice versa. The Currency Score difference may be negative. In that case, the trade should be made after a pullback. In other words, a trade can then only take place after a recovery and the main trend being confirmed again.
  2. Second, only equally classified currencies are approved when there is a positive Currency Score difference. Also here, the trend has to be confirmed again.
    The difference between point 2 and 1 is that the long trend is not clear with 2 equally qualified currencies because that pair is in a sideway market. For that reason, the Currency Score difference cannot have a negative difference. A positive difference confirms the momentum for a short revival.
  3. Third, only Neutral currencies are Approved against a better-classified currency when there is a Currency Score difference of at least +4. In the case of a currency worse classified, the Currency Score difference has to be at least -4.
    The above-mentioned situations applicable to this point may happen when there is a clear reversal and the chart is showing a new trend with good entries in the new direction. The difference between point 3 and the previous 2 points is that with point 3 a reversal in the whole market is possible when looking at all the currencies together. This gives a better chance when a trend reversal takes place compared to point 1 and 2!
  4. By preference, each currency should be selected for a trade with a score difference as far apart from each other as possible in the range from 1 to 8. However, these opportunities are rare and for that reason point 1 offers flexibility and is the best choice to trade, point 2 is the second best and point 3 is the third best choice.
  5. The classification of the currencies in question may change in the longer term. Even though currencies may be in the same category a currency may be in a weaker/stronger period and may even change its classification in the future. See the current classification for the coming period at the beginning of this article.


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Putting the pieces together

Based on the last "13 Weeks currency classification" and the "Currency Comparison Table" the most interesting currencies for going long seem to be the:
EUR and AUD.
These are Strong or Neutral currencies from a longer term perspective when looking at the last "13 Weeks currency classification".

For going short the same analysis can be done and the following currencies seem to fit best:
GBP and USD.
These are Weak or Neutral currencies from a longer term perspective.

Currencies with a high deviation seem less interesting to trade because they are less predictable. A good example now is/are e.g. the:
JPY and NZD.



______________________________________

Besides this article, I also use the Forex "Ranking, Rating and Score" which is also available once a week on my blog. In the article "Ranking, Rating and Score" we look in more detail at the absolute position of the currencies and pairs.

It is recommended to read the page "Currency score explained", "Introduction to the FxTaTrader Forex Models" and "Statistics and Probabilities" for a better understanding of the article. If you would like to use this article then mention the source by providing the URL FxTaTrader.com or the direct link to this article. Good luck in the coming week.

______________________________________

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 a recommendation to purchase any financial instruments. The choice and risk are always yours. Thank you.

Forex Metrics and Chart Week 33 / 2017

The Top 10 of the Ranking and Rating list for the coming week shows the following stronger currencies being well represented for going long: the EUR(5X) followed by the AUD(2X) with the JPY(2X). The weaker currencies are the GBP(4X) followed by the USD(3X).
By diversifying a nice combination can be traded in the coming week like e.g.:
  • EUR/GBP with the AUD/USD
  • GBP/JPY with the EUR/USD

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Ranking and Rating list

Analysis based on TA charts for all the major currency pairs. Good luck to all. No advice, just info. Every week the Forex ranking rating list will be prepared for the weekend. All the relevant Time Frames will be analyzed and the ATR and Pip value will be set.





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For analyzing the best pairs to trade looking from a longer-term perspective the last 13 weeks Currency Classification can be used in support.
This was updated on 06 August 2017 and is provided here for reference purposes:
Strong: EUR and NZD. The preferred range is from 7 to 8.
Neutral: AUD, CAD and CHF. The preferred range is 4 to 6.
Weak: USD, JPY, GBP. The preferred range is from 1 to 3.

When comparing the 13 weeks Currency Classification with the pairs mentioned in the Ranking List above some would then become less interesting. On the other hand, these pairs are at the top of the list partly also because of their volatility. It seems best to take positions for a short period then and take advantage of the high price movements.
With the FxTaTrader Strategy, these pairs are not traded because these would be trades in the 4 Hour chart or in a lower Time Frame. Nevertheless, they may offer good chances for the short term trader.


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Currency Score Chart

The Currency Score analysis is one of the parameters used for the Ranking and Rating list which is published also in this article. The Currency Score is 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 is the screenshot here below.

When comparing the 13 weeks Currency Classification with the recent Currency Score, as provided in the image above, we can determine the deviations. In the article "Forex Strength and Comparison" this is analyzed in more detail.


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Chart of the Week




The Chart for this week is again the GBP/AUD Daily chart.
Last week this pair had an opportunity which is still valid but the pull-back was not strong enough yet. This week it offers another opportunity where the pull-back does not need to be as strong. The reason for this is that the pair seems to consolidate at a lower level in the last few days.
Price is below the Tenkan-Sen and clearly in a downtrend, the pair made a pullback a few days ago and may continue to consolidate for a few more days before continuing the downtrend.
  1. A nice sell opportunity would be once the PSAR turns Short. As a precaution for a quick hit on the stop-loss, it seems best to wait for a pullback around the area where the Tenkan-Sen is currently. Above and around 1.6600 (white dotted line) is the Low and Bottom of the downtrend in June with a Fractal (purple arrow) and the Open and Close of the Top in August. This seems like a good resistance area which was once a support.
  2. The target should be around the lowest recent Close where Nr. 2 is. Price has been there several times in the last days and this seems a target within reach in the short term. 
  3. The MACD should by preference show weakness with at least the MACD minus Signal showing smaller blue bars before looking for an entry. This is the case already but not all the other conditions are met yet so this may change again.
The 4H. chart may offer good information for the entry price. There is then a range of +/- 240 Pips from the levels discussed in point 1 to point 2 and taking profit there seems realistic.
  • This is a pair that fits best in Point 1 of the Comparison Table Guide which you can also read here below.
    • First of all better-classified currencies in combination with weaker-classified currencies can always be traded. The Currency Score difference may be negative. In that case, the trade should be made after a pullback. In other words, a trade can then only take place after a recovery and the main trend being confirmed again.
  • The GBP is a Weak currency and the AUD a Neutral currency, the Currency Score Difference is 5.
For more information about the "Comparison Table Guide" read my other Weekly article called the "Forex Strength and Comparison".


______________________________________

Besides this article, I also use the Forex "Strength and Comparison" which is also available once a week on my blog. In that article, we look in more detail at the relative position of the currencies and pairs. We will look in more detail at the interesting pairs from a longer term perspective for trading in the Daily and Weekly chart. We will use the information from this article, "Ranking, Rating and Score", and analyze it further in more detail.

It is recommended to read the page "Currency score explained", "Introduction to the FxTaTrader Forex Models" and "Statistics and Probabilities" for a better understanding of the article. If you would like to use this article, then mention the source by providing the URL FxTaTrader.com or the direct link to this article. Good luck in the coming week.

______________________________________

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 a recommendation to purchase any financial instruments. The choice and risk are always yours. Thank you.

Monday, August 7, 2017

Forex Strength And Comparison Aug./ 2017

In the Currency Strength table, the EUR was the strongest currency while the GBP was again the weakest. There were some significant changes last month with the JPY gaining 3 points, the AUD 2 points, while the GBP, CHF and NZD lost 2 points. The other currencies remained around the same level of last month with a maximum change in the strength of just 1 point.


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 12 Months Currency Score Strength

The 12 Months Currency Strength and the 12 Months Average are provided here below. This data and the "12 months Currency Classification" are considered for deciding on the preferred range. Because it is not ideal nor desired to change the range for a currency every single month, we perform several checks to avoid this.
  1. First of all the strength over a period of the last 12 months is considered. See each row for more information.
  2. Next, the 12 months average is considered, see the last row called "Avg. 12 M."
  3. The number of months that a currency was stronger than another currency can also be considered.
  4. The Technical Analysis (TA) Charts for each Time Frame could also be consulted.



For analyzing the best pairs to trade looking from a longer-term perspective the last 12 months Currency Classification can be used in support.
This was updated on 2 July 2017 and is provided here for reference purposes: 
Strong: USD, NZD. The preferred range is from 7 to 8.
Neutral: JPY, AUD, CHF. The preferred range is from 4 to 6.
Weak: EUR, GBP, CAD. The preferred range is from 1 to 3.

When looking at the Average 12 M. Score we can see that the USD and the NZD are clearly grouped together as Strong currencies.
We can also see that the EUR, CHF and GBP are grouped together being all Weak currencies. The CHF lost some strength in the last 2 months and the 
Average 12 M. Score shows that this currency is in between the Neutral and Weak currencies.
The Weak currencies are the EUR, CAD and GBP. Although the last Score of the EUR was the highest Score of the month, the 
Average 12 M. Score is still the lowest, after the GBP, of all the currencies.



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Classification review

This month we take a look at the Weak currencies. As can be seen in the chart the EUR gained a lot of strength in the last 3 months. The GBP lost a lot of strength in the last 3 months. Both currencies remain very weak, the CAD remains more at the center of the range and has the highest score of all the 3 Weak currencies.
Below you can see the Monthly Currency Score Chart with the 6 months' data as a reference.




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Currency Score Comparison

 "Comparison table" and the "Ranking and Rating list"

The Forex Currency Comparison Table compares each currency with its counterpart based on the Currency Score. For more information about the currency Score of this month, you can read the article "Forex Ranking, Rating and Score" which is published every month together with this article.
By using the comparison table directly below you can get a view without the volatility and statistics as opposed to the "Ranking and Rating list". Only the strength of each currency against the counterparts is analyzed by using the Technical analysis charts of the 4 Time Frames that are also used for the "Ranking and Rating List".
The information from the Comparison Table is the source for calculating the "Ranking and Rating List" where this list additionally uses the volatility and statistics for creating the best and worst performer in the list from number 1 to 28.

The information is published once a month and be aware that rates change during this period. The mentioned scores also change and different opportunities may show up. There are many ways to follow the rate changes. This can be done e.g. by looking at the charts and checking e.g. the Ichimoku and/or MACD in the Monthly and Weekly chart. There are also many tools, apps and websites where the movement of trading rates of currencies is shown in different automated ways. This may be in pips or through percentage differences or by comparing the values of indicators like the RSI, Moving Averages, MACD, Ichimoku etc. On my blog a Heatmap is available that can be of use also.








"Comparison table" and the "Currency Score Chart"

The additional value of this table compared to the Currency Score table is that the Comparison Table compares the strength between the currencies of each pair. By subtracting the strength of the weaker currency from the stronger currency we have a way to compare each pair combination.
The comparison table provides a way to compare currencies from a longer-term perspective of 12 months and also simultaneously taking the current trend into account. By coloring the currencies in the X and Y axis according to their Classification we can show what the best combinations are.


Comparison table Guide

  1. First of all better-classified currencies in combination with weaker-classified currencies can always be traded and vice versa. The Currency Score difference may be negative. In that case, the trade should be made after a pullback. In other words, a trade can then only take place after a recovery and the main trend being confirmed again.
  2. Second, only equally classified currencies are approved when there is a positive Currency Score difference. Also here, the trend has to be confirmed again.
    The difference between point 2 and 1 is that the long trend is not clear with 2 equally qualified currencies because that pair is in a sideway market. For that reason, the Currency Score difference cannot have a negative difference. A positive difference confirms the momentum for a short revival.
  3. Third, only Neutral currencies are Approved against a better-classified currency when there is a Currency Score difference of at least +4. In the case of a currency worse classified, the Currency Score difference has to be at least -4.
    The above-mentioned situations applicable to this point may happen when there is a clear reversal and the chart is showing a new trend with good entries in the new direction. The difference between point 3 and the previous 2 points is that with point 3 a reversal in the whole market is possible when looking at all the currencies together. This gives a better chance when a trend reversal takes place compared to point 1 and 2!
  4. By preference, each currency should be selected for a trade with a score difference as far apart from each other as possible in the range from 1 to 8. However, these opportunities are rare and for that reason point 1 offers flexibility and is the best choice to trade, point 2 is the second best and point 3 is the third best choice.
  5. The classification of the currencies in question may change in the longer term. Even though currencies may be in the same category a currency may be in a weaker/stronger period and may even change its classification in the future. See the current classification for the coming period at the beginning of this article.


______________________________________

Putting the pieces together

Based on the last "12 Months currency classification" and the "Currency Comparison Table" the most interesting currencies for going long seem to be the:
AUD and NZD.
These are Strong or Neutral currencies from a longer term perspective when looking at the last "12 Months currency classification".

For going short the same analysis can be done and the following currencies seem to fit best:
GBP and CHF.
These are Weak or Neutral currencies from a longer term perspective.

Currencies with a high deviation seem less interesting to trade because they are less predictable. A good example now is/are e.g. the:
EUR, USD and CAD.



______________________________________

Besides this article, I also use the Forex "Ranking, Rating and Score" which is also available once a month on my blog. In the article "Ranking, Rating and Score" we look in more detail at the absolute position of the currencies and pairs.

It is recommended to read the page "Currency score explained", "Introduction to the FxTaTrader Forex Models" and "Statistics and Probabilities" for a better understanding of the article. If you would like to use this article then mention the source by providing the URL FxTaTrader.com or the direct link to this article. Good luck in the coming month.

______________________________________

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 a recommendation to purchase any financial instruments. The choice and risk are always yours. Thank you.

Forex Metrics and Chart Month Aug. / 2017

The Top 10 of the Ranking and Rating list for the coming month shows the following stronger currencies being well represented for going long: the EUR(4X) followed by the AUD(2X) with the NZD(2X). The weaker currencies are the GBP(5X) followed by the CHF(3X).
By diversifying a nice combination can be traded in the coming month like e.g.:
  • EUR/GBP with the AUD/CHF
  • GBP/AUD with the EUR/CHF


______________________________________

Ranking and Rating list

Analysis based on TA charts for all the major currency pairs. Good luck to all. No advice, just info. Every month the Forex ranking rating list will be prepared around the change of the month. All the relevant Time Frames will be analyzed and the ATR and Pip value will be set.






______________________________________

For analyzing the best pairs to trade looking from a longer-term perspective the last 12 months Currency Classification can be used in support.
This was updated on 2 July 2017 and is provided here for reference purposes: 
Strong: USD, NZD. The preferred range is from 7 to 8.
Neutral: JPY, AUD, CHF. The preferred range is from 4 to 6.
Weak: EUR, GBP, CAD. The preferred range is from 1 to 3.

When comparing the 12 months Currency Classification with the pairs mentioned in the Ranking List above some would then become less interesting. On the other hand, these pairs are at the top of the list partly also because of their volatility. It seems best to take positions for a short period then and take advantage of the high price movements.
With the FxTaTrader Strategy, these pairs are not traded because these would be trades in the 4 Hour chart or in a lower Time Frame. Nevertheless, they may offer good chances for the short term trader.



______________________________________

Currency Score Chart

The Currency Score analysis is one of the parameters used for the Ranking and Rating list which is published also in this article. The Currency Score is 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 is the screenshot here below.


When comparing the 12 months Currency Classification with the recent Currency Score, as provided in the image above, we can determine the deviations. In the article "Forex Strength and Comparison" this is analyzed in more detail.



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Chart of the Month



The Chart for this month is the AUD/USD Weekly chart.
Price is above the Tenkan-Sen and clearly in an uptrend, the pair made a high with a fractal a few weeks ago and may consolidate in the coming period a few more weeks before continuing the uptrend. The PSAR is looking fine for taking long positions and the MACD is also confirming this.
  1. A nice buy opportunity would be on pullback below the Kijun-Sen. There is a yellow dotted line at 0.7730 and that seems to be more or less the middle of the area (+/- 40 pips) where the fractals are. This is a good support area for that reason and also because it is near the Kijun-Sen which is a good support also.
  2. The MACD should go by preference around the signal line and once it gets stronger it may become interesting to look for an entry. Strength can be seen in the minus Signal (blue and red bars).
  3. A safe and realistic profit level would be below the last top. That is also where a fractal was made around the price of 0.8065.
The Daily chart may offer good information for the entry price. There is a range of +/- 250 Pips between the entry discussed in point 1 and the profit level discussed in point 3.

  • This is a pair that fits best in Point 3 of the Comparison Table Guide which you can also read here below.
    • Third, only Neutral currencies are Approved against a better-classified currency when there is a Currency Score difference of at least +4. In the case of a currency worse classified, the Currency Score difference has to be at least -4.
      The above-mentioned situations applicable to this point may happen when there is a clear reversal and the chart is showing a new trend with good entries in the new direction. The difference between point 3 and the previous 2 points is that with point 3 a reversal in the whole market is possible when looking at all the currencies together. This gives a better chance when a trend reversal takes place compared to point 1 and 2!
  • The AUD is a Neutral currency and the USD a Strong currency, the Currency Score Difference is +4.
For more information about the "Comparison Table Guide" read my other Monthly article called the "Forex Strength and Comparison".


______________________________________

Besides this article, I also use the Forex "Strength and Comparison" which is also available once a month on my blog. In that article, we look in more detail at the relative position of the currencies and pairs. We will look in more detail at the interesting pairs from a longer term perspective for trading in the Daily and Weekly chart. We will use the information from this article, "Ranking, Rating and Score", and analyze it further in more detail.

It is recommended to read the page "Currency score explained", "Introduction to the FxTaTrader Forex Models" and "Statistics and Probabilities" for a better understanding of the article. If you would like to use this article, then mention the source by providing the URL FxTaTrader.com or the direct link to this article. Good luck in the coming month.



______________________________________

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 a recommendation to purchase any financial instruments. The choice and risk are always yours. Thank you.

Forex Strength and Comparison Week 32 / 2017

In the Currency Strength table, the AUD was the strongest currency while the GBP was the weakest. There were some significant changes last week with the USD, EUR and AUD gaining 2 points, the CAD lost 3 points while the GBP and NZD lost 2 points. The other currencies remained around the same level of last week with a maximum change in the strength of just 1 point.
Last week there was a Classification change and we will look at it at more detail in this article.



______________________________________

 13 Weeks Currency Score Strength

The 13 Weeks Currency Strength and the 13 Weeks Average are provided here below. This data and the "13 weeks Currency Classification" are considered for deciding on the preferred range. Because it is not ideal nor desired to change the range for a currency every single week, we perform several checks to avoid this.
  1. First of all the strength over a period of the last 13 weeks is considered. See each row for more information.
  2. Next, the 13 weeks average is considered, see the last row called "Avg. 13 wks."
  3. The number of weeks that a currency was stronger than another currency can also be considered.
  4. The Technical Analysis (TA) Charts for each Time Frame could also be consulted.


For analyzing the best pairs to trade looking from a longer-term perspective the last 13 weeks Currency Classification can be used in support.
This was updated on 06 August 2017 and is provided here for reference purposes:
Strong: EUR and NZD. The preferred range is from 7 to 8.
Neutral: AUD, CAD and CHF. The preferred range is 4 to 6.
Weak: USD, JPY, GBP. The preferred range is from 1 to 3.

When looking at the Average 13 wks. Score we can see that the EUR and the NZD are clearly grouped together as Strong currencies.
We can also see that the USD, JPY and GBP are also grouped together being all Weak currencies. The CHF lost some strength in the last 7 weeks and the 
Average 13 wks. Score shows that this currency fits better in the group of neutral currencies so it changed Classification from Strong to Neutral. It is now together with the AUD and the CAD in the group of Neutral currencies.




_____________________________________

Classification review

This week we take a look at the Neutral currencies. As can be seen in the chart the CHF lost a lot of strength and is now a Neutral currency. The CAD was getting stronger but lost a lot of strength last week and back to a Score within the Neutral range. The AUD seems to gain strength but is still a Neutral currency. It will need to continue performing good in the coming weeks before it can become a Strong currency.Below you can see the Weekly Currency Score Chart with the 6 months' data as a reference.



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Currency Score Comparison

 "Comparison table" and the "Ranking and Rating list"

The Forex Currency Comparison Table compares each currency with its counterpart based on the Currency Score. For more information about the currency Score of this week, you can read the article "Forex Ranking, Rating and Score" which is published every week together with this article.
By using the comparison table directly below you can get a view without the volatility and statistics as opposed to the "Ranking and Rating list". Only the strength of each currency against the counterparts is analyzed by using the Technical analysis charts of the 4 Time Frames that are also used for the "Ranking and Rating List".
The information from the Comparison Table is the source for calculating the "Ranking and Rating List" where this list additionally uses the volatility and statistics for creating the best and worst performer in the list from number 1 to 28.

The information is published once a week and be aware that rates change during this period. The mentioned scores also change and different opportunities may show up. There are many ways to follow the rate changes. This can be done e.g. by looking at the charts and checking e.g. the Ichimoku and/or MACD in the Weekly and Daily chart. There are also many tools, apps and websites where the movement of trading rates of currencies is shown in different automated ways. This may be in pips or through percentage differences or by comparing the values of indicators like the RSI, Moving Averages, MACD, Ichimoku etc. On my blog a Heatmap is available that can be of use also.








"Comparison table" and the "Currency Score Chart"

The additional value of this table compared to the Currency Score table is that the Comparison Table compares the strength between the currencies of each pair. By subtracting the strength of the weaker currency from the stronger currency we have a way to compare each pair combination.
The comparison table provides a way to compare currencies from a longer-term perspective of 13 weeks and also simultaneously taking the current trend into account. By coloring the currencies in the X and Y axis according to their Classification we can show what the best combinations are.


Comparison table Guide
  1. First of all better-classified currencies in combination with weaker-classified currencies can always be traded. Of course, weaker-classified currencies in combination with better-classified currencies can always be traded. The Currency Score difference may be negative. In that case, the trade should be made after a pullback. In other words, a trade can then only take place after a recovery and the main trend being confirmed again.
  2. Second, only equally classified currencies are approved when there is a positive Currency Score difference. Also here, the trend has to be confirmed again.
    The difference between point 2 and 1 is that the long trend is not clear with 2 equally qualified currencies because that pair is in a sideway market. For that reason, the Currency Score difference cannot have a negative difference. A positive difference confirms the momentum for a short revival.
  3. Third, only Neutral currencies are Approved against a better-classified currency when there is a Currency Score difference of at least 4. In the case of a currency worse classified, the Currency Score difference has to be at least -4.
    The above-mentioned situations applicable to this point may happen when there is a clear reversal and the chart is showing a new trend with good entries in the new direction. The difference between point 3 and the previous 2 points is that with point 3 a reversal in the whole market is possible when looking at all the currencies together. This gives a better chance when a trend reversal takes place compared to point 1 and 2!
  4. By preference, each currency should be selected for a trade with a score difference as far apart from each other as possible in the range from 1 to 8. However, these opportunities are rare and for that reason point 1 offers flexibility and is the best choice to trade, point 2 is the second best and point 3 is the third best choice.
  5. The classification of the currencies in question may change in the longer term. Even though currencies may be in the same category a currency may be in a weaker/stronger period and may even change its classification in the future. See the current classification for the coming period at the beginning of this article.


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Putting the pieces together

Based on the last "13 Weeks currency classification" and the "Currency Comparison Table" the most interesting currencies for going long seem to be the:
EUR, AUD and NZD.
These are Strong or Neutral currencies from a longer term perspective when looking at the last "13 Weeks currency classification".

For going short the same analysis can be done and the following currencies seem to fit best:
GBP, CHF and USD.
These are Weak or Neutral currencies from a longer term perspective.

Currencies with a high deviation seem less interesting to trade because they are less predictable. A good example now is/are e.g. the:
JPY and CHF.



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Besides this article, I also use the Forex "Ranking, Rating and Score" which is also available once a week on my blog. In the article "Ranking, Rating and Score" we look in more detail at the absolute position of the currencies and pairs.

It is recommended to read the page "Currency score explained", "Introduction to the FxTaTrader Forex Models" and "Statistics and Probabilities" for a better understanding of the article. If you would like to use this article then mention the source by providing the URL FxTaTrader.com or the direct link to this article. Good luck in the coming week.

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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 a recommendation to purchase any financial instruments. The choice and risk are always yours. Thank you.

Forex Metrics and Chart Week 32/ 2017

The Top 10 of the Ranking and Rating list for the coming week shows the following stronger currencies being well represented for going long: the EUR(4X) followed by the AUD(2X) with the NZD(2X). The weaker currencies are the GBP(5X) followed by the CHF(3X) and the CAD(2X).
By diversifying a nice combination can be traded in the coming week like e.g.:
  • EUR/GBP with the GBP/NZD
  • GBP/AUD with the EUR/CAD

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Ranking and Rating list

Analysis based on TA charts for all the major currency pairs. Good luck to all. No advice, just info. Every week the Forex ranking rating list will be prepared for the weekend. All the relevant Time Frames will be analyzed and the ATR and Pip value will be set.






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For analyzing the best pairs to trade looking from a longer-term perspective the last 13 weeks Currency Classification can be used in support.
This was updated on 06 August 2017 and is provided here for reference purposes:
Strong: EUR and NZD. The preferred range is from 7 to 8.
Neutral: AUD, CAD and CHF. The preferred range is 4 to 6.
Weak: USD, JPY, GBP. The preferred range is from 1 to 3.

When comparing the 13 weeks Currency Classification with the pairs mentioned in the Ranking List above some would then become less interesting. On the other hand, these pairs are at the top of the list partly also because of their volatility. It seems best to take positions for a short period then and take advantage of the high price movements.
With the FxTaTrader Strategy, these pairs are not traded because these would be trades in the 4 Hour chart or in a lower Time Frame. Nevertheless, they may offer good chances for the short term trader.

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Currency Score Chart

The Currency Score analysis is one of the parameters used for the Ranking and Rating list which is published also in this article. The Currency Score is 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 is the screenshot here below.




When comparing the 13 weeks Currency Classification with the recent Currency Score, as provided in the image above, we can determine the deviations. In the article "Forex Strength and Comparison" this is analyzed in more detail.


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Chart of the Week




The Chart for this week is the GBP/AUD Daily chart.
Price is below the Tenkan-Sen and clearly in a downtrend, the pair made a pullback a few days ago and may continue to consolidate for a few more days before continuing the downtrend.
  1. A nice sell opportunity would be on pullback around the area where the Kijun-Sen is now. Above that is the high of the last Fractal (blue arrow) and together with the lows of the Fractals (purple arrows) in June, this seems like a good resistance area.
  2. Since the PSAR did not turn short yet the target should be modest. Nr. 2 in the chart shows where the price is at the opening of this week but also where there are many highs at the end of July.This seems a good level to take profit.
  3. The MACD will get stronger but once the MACD minus Signal (blue and red bars) starts showing weakness it becomes interesting for looking at an entry. This is also the case now but price should first to the level explained in point 1.
The 4H. chart may offer good information for the entry price. There is then a range of +/- 200 Pips to the level discussed in point 2 and taking profit there seems realistic.
  • This is a pair that fits best in Point 1 of the Comparison Table Guide which you can also read here below.
    • First of all better-classified currencies in combination with weaker-classified currencies can always be traded. Of course, weaker-classified currencies in combination with better-classified currencies can always be traded. The Currency Score difference may be negative. In that case, the trade should be made after a pullback. In other words, a trade can then only take place after a recovery and the main trend being confirmed again.
  • The GBP is a Weak currency and the AUD a Neutral currency, the Currency Score Difference is 6.
For more information about the "Comparison Table Guide" read my other Weekly article called the "Forex Strength and Comparison".


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Besides this article, I also use the Forex "Strength and Comparison" which is also available once a week on my blog. In that article, we look in more detail at the relative position of the currencies and pairs. We will look in more detail at the interesting pairs from a longer term perspective for trading in the Daily and Weekly chart. We will use the information from this article, "Ranking, Rating and Score", and analyze it further in more detail.

It is recommended to read the page "Currency score explained", "Introduction to the FxTaTrader Forex Models" and "Statistics and Probabilities" for a better understanding of the article. If you would like to use this article, then mention the source by providing the URL FxTaTrader.com or the direct link to this article. Good luck in the coming week.

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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 a recommendation to purchase any financial instruments. The choice and risk are always yours. Thank you.

Sunday, July 30, 2017

Forex Strength and Comparison Week 31 / 2017

In the Currency Strength table, the NZD was the strongest currency while the USD was the weakest. There were some significant changes last week with the GBP gaining 2 points and the CHF losing 2 points.. The other currencies remained around the same level of last week with a maximum change in the strength of just 1 point.
Last week there was a Classification change and we will look at it at more detail in this article.



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 13 Weeks Currency Score Strength

The 13 Weeks Currency Strength and the 13 Weeks Average are provided here below. This data and the "13 weeks Currency Classification" are considered for deciding on the preferred range. Because it is not ideal nor desired to change the range for a currency every single week, we perform several checks to avoid this.
  1. First of all the strength over a period of the last 13 weeks is considered. See each row for more information.
  2. Next, the 13 weeks average is considered, see the last row called "Avg. 13 wks."
  3. The number of weeks that a currency was stronger than another currency can also be considered.
  4. The Technical Analysis (TA) Charts for each Time Frame could also be consulted.



For analyzing the best pairs to trade looking from a longer-term perspective the last 13 weeks Currency Classification can be used in support.
This was updated on 30 July 2017 and is provided here for reference purposes:
Strong: EUR, NZD and CHF. The preferred range is from 6 to 8.
Neutral: AUD, CAD. The preferred range is 4 to 5.
Weak: USD, JPY, GBP. The preferred range is from 1 to 3.

When looking at the Average 13 wks. Score we can see that the EUR, CHF and the NZD are clearly grouped together as Strong currencies.
We can also see that the USD, JPY and GBP are also grouped together being all Weak currencies. The AUD gained some strength in the last 8 Weeks and the 
Average 13 wks. Score shows that this currency fits better in the group of neutral currencies so it changed Classification from Weak to Neutral. It is now together with the CAD in the group of Neutral currencies.




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Classification review

This week we take a look at the Strong currencies.As can be seen in the chart the NZD and EUR are on track with the EUR being a bit weaker. The CHF however, it showing weakness in the last 5 weeks and is making lower highs and lower lows. If it continues doing so in the coming weeks it may become a Neutral currency.Below you can see the Weekly Currency Score Chart with the 6 months' data as a reference.




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Currency Score Comparison

 "Comparison table" and the "Ranking and Rating list"

The Forex Currency Comparison Table compares each currency with its counterpart based on the Currency Score. For more information about the currency Score of this week, you can read the article "Forex Ranking, Rating and Score" which is published every week together with this article.
By using the comparison table directly below you can get a view without the volatility and statistics as opposed to the "Ranking and Rating list". Only the strength of each currency against the counterparts is analyzed by using the Technical analysis charts of the 4 Time Frames that are also used for the "Ranking and Rating List".
The information from the Comparison Table is the source for calculating the "Ranking and Rating List" where this list additionally uses the volatility and statistics for creating the best and worst performer in the list from number 1 to 28.

The information is published once a week and be aware that rates change during this period. The mentioned scores also change and different opportunities may show up. There are many ways to follow the rate changes. This can be done e.g. by looking at the charts and checking e.g. the Ichimoku and/or MACD in the Weekly and Daily chart. There are also many tools, apps and websites where the movement of trading rates of currencies is shown in different automated ways. This may be in pips or through percentage differences or by comparing the values of indicators like the RSI, Moving Averages, MACD, Ichimoku etc. On my blog a Heatmap is available that can be of use also.






"Comparison table" and the "Currency Score Chart"

The additional value of this table compared to the Currency Score table is that the Comparison Table compares the strength between the currencies of each pair. By subtracting the strength of the weaker currency from the stronger currency we have a way to compare each pair combination.
The comparison table provides a way to compare currencies from a longer-term perspective of 13 weeks and also simultaneously taking the current trend into account. By coloring the currencies in the X and Y axis according to their Classification we can show what the best combinations are. In doing this we apply 2 rules to make it clearer.



Comparison table Guide
  1. First of all better-classified currencies in combination with weaker-classified currencies can always be traded. The Currency Score difference may be negative. In that case, the trade should be made after a pullback. In other words, a trade can then only take place after a recovery and the main trend being confirmed again.
  2. Second, only equally classified currencies are approved when there is a positive Currency Score difference. Also here, the trend has to be confirmed again.
    The difference between point 2 and 1 is that the long trend is not clear with 2 equally qualified currencies because that pair is in a sideway market. For that reason, the Currency Score difference cannot have a negative difference. A positive difference confirms the momentum for a short revival.
  3. Third, only Neutral currencies are Approved against a better-classified currency when there is a Currency Score difference of at least 4. In the case of a currency worse classified, the Currency Score difference has to be at least -4.
    The above-mentioned situations applicable to this point may happen when there is a clear reversal and the chart is showing a new trend with good entries in the new direction. The difference between point 3 and the previous 2 points is that with point 3 a reversal in the whole market is possible when looking at all the currencies together. This gives a better chance when a trend reversal takes place compared to point 1 and 2!
  4. By preference, each currency should be selected for a trade with a score difference as far apart from each other as possible in the range from 1 to 8. However, these opportunities are rare and for that reason point 1 offers flexibility and is the best choice to trade, point 2 is the second best and point 3 is the third best choice.
  5. The classification of the currencies in question may change in the longer term. Even though currencies may be in the same category a currency may be in a weaker/stronger period and may even change its classification in the future. See the current classification for the coming period at the beginning of this article.


______________________________________

Putting the pieces together

Based on the last "13 Weeks currency classification" and the "Currency Comparison Table" the most interesting currencies for going long seem to be the:
NZD, CAD and EUR.
These are Strong or Neutral currencies from a longer term perspective when looking at the last "13 Weeks currency classification".

For going short the same analysis can be done and the following currencies seem to fit best:
USD and GBP.
These are Weak or Neutral currencies from a longer term perspective.

Currencies with a high deviation seem less interesting to trade because they are less predictable. A good example now is/are e.g. the:
CAD and CHF.



______________________________________

Besides this article, I also use the Forex "Ranking, Rating and Score" which is also available once a week on my blog. In the article "Ranking, Rating and Score" we look in more detail at the absolute position of the currencies and pairs.

It is recommended to read the page "Currency score explained", "Introduction to the FxTaTrader Forex Models" and "Statistics and Probabilities" for a better understanding of the article. If you would like to use this article then mention the source by providing the URL FxTaTrader.com or the direct link to this article. Good luck in the coming week.

______________________________________

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 a recommendation to purchase any financial instruments. The choice and risk are always yours. Thank you.