FxTaTrader


Forex Technical Analysis based on experience and research.

Sunday, December 4, 2016

Forex Strength and Comparison for Week 49 / 2016

In the Currency Strength table the NZD was the strongest currency while the JPY was the weakest. All the currencies are more or less at the same level as last week except for the CAD gaining 3 points.



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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 4 December 2016 and is provided here for reference purposes:
Strong: USD, NZD. The preferred range is from 7 to 8.
Neutral: JPY, CHF, AUD. 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 13 wks. Score the JPY(Strong) is now closer to the Neutral currencies than the Strong currencies. For the last 4 weeks this currency was in the range of the weak currencies. For that reason the classification has changed from Strong to Neutral.



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The Neutral Currencies

The JPY is in a dip and having even a lower Score than the other Neutral currencies. Coming from a Strong currency a rebound is still expected but this may take a while and for now it is a Neutral currency. As can be seen in the chart the CHF and AUD are remaiming well in the Neutral range for a long time. The AUD had a peak to 8 in October but went back to the Neutral range very fast.
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.




"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.

  1. First of all only better classified currencies in combination with weaker classified currencies are "Approved" when there is a Currency Score difference of at least 1 in the current week.
  2. The only exception is when 2 currencies are similarly classified but the Currency Score difference is equal to or more than 4.
  3. It means that each currency should be as far apart from each other as possible in the range from 1 to 8. The classification of the currencies in question may change in the longer term. By using the difference of 4 which is exact at the half of the range it seems a safe approach for trading 2 currencies which are similarly classified.
  4. Even though currencies may be in the same classification 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 and USD
.
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:
JPY, EUR 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 at the moment is e.g. the:
CAD, GBP and JPY.

Some of the pairs in the "Currency Comparison Table" comply for a longer term trade based on the Technical Analysis (TA) of the Daily and Weekly chart. For the coming week these seem to be:NZD/JPY, EUR/NZD, EUR/CAD, NZD/CHF, AUD/NZD and USD/JPY.




______________________________________

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 and Models in practice 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 recommendation to purchase any financial instruments. The choice and risk is always yours. Thank you.

Forex Ranking, Rating and Score for Week 49 / 2016

The Top 10 of the Ranking and Rating list for the coming week shows the following stronger currencies being well represented for going long: NZD(4X) followed by the CAD(3x). The weaker currencies are the JPY(4X) followed by the EUR(3X) and the CHF(2X).
A nice combination for coming week may be e.g:
  • NZD/JPY with the CAD/CHF
  • EUR/NZD with the CAD/JPY
Some of the pairs in the Top 10 comply for a longer term trade based on the Technical Analysis (TA) of the Daily and Weekly chart. For the coming week these seem to be: NZD/JPY, EUR/NZD, EUR/CAD, NZD/CHF, AUD/NZD and USD/JPY.
For more details read both of my articles where the relevant Charts and Tables are provided.




______________________________________

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 in 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 4 December 2016 and is provided here for reference purposes:
Strong: USD, NZD. The preferred range is from 7 to 8.
Neutral: JPY, CHF, AUD. The preferred range is from 4 to 6.
Weak: EUR, GBP, CAD. 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.




______________________________________

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. Currencies with a high deviation seem less interesting to trade because they are less predictable. A good example at the moment is/are e.g. the CAD, GBP and JPY. Unless a clear opportunity based on the longer term is shown it seems best to be avoided.



______________________________________

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" and "Models in practice" 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 recommendation to purchase any financial instruments. The choice and risk is always yours. Thank you.

Tuesday, November 29, 2016

Forex Strength And Comparison for December 2016

In the Currency Strength table the USD was again the strongest currency while the EUR was the weakest. The AUD and NZD remain firm having for a long period a similar score. The NZD has now for 6 months a Score of 7 and the AUD 4 times a Score of 6 and 2 times near that Score.
Although the GBP gained a lot of strength in the last Weeks it only gained 1 point last month. The JPY lost strength for a second month but it is still the strongest currency when looking at the Avg. 12 months. For more details read both of my articles where the relevant Charts and Tables are provided.



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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 12 months. See each row for more information.
  2. Then the 12 months average, see the last row called "Avg. 12 M."
  3. The number of months that a currency is stronger than another currency can also be evaluated.
  4. The TA Charts for each Time Frame can 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 30 September 2016 and is provided here for reference purposes:
Strong: USD, JPY, NZD. The preferred range is from 6 to 8.
Neutral: AUD, CHF. The preferred range is from 4 to 5.
Weak: EUR, GBP, CAD. The preferred range is from 1 to 3.

All the currencies are within their classification when using the Avg. 12 M. Although the JPY is in a dip this month this does not have any effect on the Avg. 12 months Currency Score. The JPY remains the strongest currency.


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The Strong Currencies

In the last 2 Months the JPY is in a dip with a score of 3 being the weakest one of the strong currencies. However, it is clear to see that this currency was in the last period very strong, the strongest of all for almost the whole year. For that reason it does not seem that this currency will continue to weaken. There will be at least a period of consolidation before the currency will get close to a Neutral classification. It has at the moment the highest Avg. 12 M. Currency Score of all currencies! As can be seen here below the USD and NZD had similar dips and recovered. The NZD is very stable lately while the USD gained strength and is back to the area of the Strong currencies.
Here below you can see the Monthly Currency Score Chart with 24 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 3 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.




"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. In doing this we apply 2 rules to make it clearer.

  1. First of all only better classified currencies in combination with weaker classified currencies are "Approved" when there is a Currency Score difference of at least 1 in the current month.
  2. The only exception is when 2 currencies are similarly classified but the Currency Score difference is equal to or more than 4.
  3. It means that each currency should be as far apart from each other as possible in the range from 1 to 8. The classification of the currencies in question may change in the longer term. By using the difference of 4 which is exact the half of the range it seems a safe approach for trading 2 currencies which are similarly classified.
  4. Even though currencies may be in the same classification 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:
USD, NZD and AUD
.
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:
EUR, GBP and CAD.
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 at the moment is e.g. the:
JPY.

Some of the pairs in the "Currency Comparison Table" comply for a longer term trade based on the Technical Analysis (TA) of the Daily and Monthly chart. For the coming month these seem to be: GBP/USD, EUR/USD, EUR/NZD, NZD/JPY, USD/CAD, USD/CHF, NZD/CAD and EUR/CHF




______________________________________

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 and Models in practice 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 recommendation to purchase any financial instruments. The choice and risk is always yours. Thank you.

Forex Ranking, Rating And Score for December 2016

The Ranking and Rating list for the coming month shows the following stronger currencies being well represented for going long: USD(5X) followed by the NZD(2X). The weaker currencies are the EUR(4X) followed by the JPY(2X) with the CAD(2X).
A nice combination for coming month may be e.g:
  • EUR/USD with the NZD/JPY
  • USD/JPY with the EUR/NZD
  • USD/CAD with the NZD/JPY
Some of the pairs in the Top 10 comply for a longer term trade based on the Technical Analysis (TA) of the Weekly and Monthly chart. For the coming month these seem to be: GBP/USD, EUR/USD, EUR/NZD, NZD/JPY, USD/CAD and USD/CHF.
For more details read both of my articles where the relevant Charts and Tables are provided.



______________________________________

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 30 September 2016 and is provided here for reference purposes:
Strong: USD, JPY, NZD. The preferred range is from 6 to 8.
Neutral: AUD, CHF. The preferred range is from 4 to 5.
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 traded in the Daily 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 3 Time Frames: the Monthly, Weekly and Daily. 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. Currencies with a high deviation seem less interesting to trade because they are less predictable. A good example at the moment is e.g. the JPY. Unless a clear opportunity based on the longer term is shown it seems best to be avoided.



______________________________________

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 Monthly 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" and "Models in practice" 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 recommendation to purchase any financial instruments. The choice and risk is always yours. Thank you.

Sunday, November 27, 2016

Forex Strength and Comparison for Week 48 / 2016

In the Currency Strength table the USD was again the strongest currency while the EUR was again the weakest. The AUD recovered from the strong pullback of the previous week and the GBP remains around the same level as in the previous 2 weeks. The CHF lost strength in the last 2 weeks and the JPY has difficulties with the continuing dip it has been in for the last 3 weeks. For more details read both of my articles where the relevant Charts and Tables are provided.



______________________________________

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 25 September 2016 and is provided here for reference purposes:
Strong: USD, JPY, NZD. The preferred range is from 6 to 8.
Neutral: CHF, AUD. The preferred range is from 4 to 5.
Weak: EUR, GBP, CAD. The preferred range is from 1 to 3.

When looking at the Average 13 wks. Score the JPY(Strong) is now the weakest of the strong currencies and getting close to to the AUD(Neutral). The JPY had 7 times a higher Score in the last 13 weeks so for this week it remains a strong currency. If the JPY does not succeed to remain stronger than the AUD then it will become a Neutral currecny.
The situation for the GBP(Weak) is almost similar to the previous 2 weeks. The 13W. Average Score is still the lowest of all but now getting close to the CAD(Weak) while the GBP has been clearly a lot weaker compared to all the currencies in the last period except for the last 3 weeks.

Until now the Classification made on 25 September 2016 is valid for 10 weeks. As it seems it can remain this way for the coming weeks except for the JPY. The distances between the 13W. Average Score of the currencies in the Weak Classification are too far from the Neutral Classification. The same can be said for the Strong Classification except for the JPY being just 0,0769 points separated from the AUD. The JPY(Strong) seems vulnerable.





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The Weak Currencies + JPY

The JPY is in a dip and having a Score lower than the GBP and CAD being Weak currencies. These dips occur more often and the JPY may recover offering opportunities. For now it seems best to go short on the EUR and if combined with the JPY a recovery may offer a good opportunity. Below you can see the Weekly Currency Score Chart with the 6 months data as a reference.







_____________________________________
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.





"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.

  1. First of all only better classified currencies in combination with weaker classified currencies are "Approved" when there is a Currency Score difference of at least 1 in the current week.
  2. The only exception is when 2 currencies are similarly classified but the Currency Score difference is equal to or more than 4.
  3. It means that each currency should be as far apart from each other as possible in the range from 1 to 8. The classification of the currencies in question may change in the longer term. By using the difference of 4 which is exact at the half of the range it seems a safe approach for trading 2 currencies which are similarly classified.
  4. Even though currencies may be in the same classification 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:
USD 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:
EUR 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 at the moment is e.g. the:
JPY and GBP.

Some of the pairs in the "Currency Comparison Table" comply for a longer term trade based on the Technical Analysis (TA) of the Daily and Weekly chart. For the coming week these seem to be: EUR/USD, USD/JPY, EUR/NZD, EUR/AUD, NZD/JPY, USD/CHF, USD/CAD, NZD/CHF, GBP/USD and NZD/CAD.




______________________________________

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 and Models in practice 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 recommendation to purchase any financial instruments. The choice and risk is always yours. Thank you.

Forex Ranking, Rating and Score for Week 48 / 2016

The Ranking and Rating list for the coming week shows the following stronger currencies being well represented for going long: USD(5X) followed by the NZD(3x) and the AUD(2X). The weaker currencies are the EUR(3X) with the JPY(3X) followed by the CHF(2X).
A nice combination for coming week may be e.g:
  • EUR/USD with the NZD/CHF
  • USD/JPY with the EUR/AUD
  • EUR/NZD with the AUD/JPY
  • NZD/JPY with the USD/CHF
Some of the pairs in the Top 10 comply for a longer term trade based on the Technical Analysis (TA) of the Daily and Weekly chart. For the coming week these seem to be: EUR/USD, USD/JPY, EUR/NZD, EUR/AUD, NZD/JPY, USD/CHF, USD/CAD, NZD/CHF and GBP/USD.
For more details read both of my articles where the relevant Charts and Tables are provided.




______________________________________

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 in the weekend. 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 13 weeks Currency Classification can be used in support.
This was updated on 25 September 2016 and is provided here for reference purposes:
Strong: USD, JPY, NZD. The preferred range is from 6 to 8.
Neutral: CHF, AUD. The preferred range is from 4 to 5.
Weak: EUR, GBP, CAD. 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.




______________________________________

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. Currencies with a high deviation seem less interesting to trade because they are less predictable. A good example at the moment is/are e.g. the GBP and JPY. Unless a clear opportunity based on the longer term is shown it seems best to be avoided.


______________________________________

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" and "Models in practice" 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 recommendation to purchase any financial instruments. The choice and risk is always yours. Thank you.

Sunday, November 20, 2016

Forex Strength and Comparison for Week 47 / 2016

In the Currency Strength table the USD was the strongest currency and the EUR the weakest. The AUD is in a dip with a score of 2 and the CAD on a high with a score of 6. The JPY lost a lot of strength in the last weeks but seems to stabilize and the GBP gained a lot of strength but seems to stabilize also. For more details read both of my articles where the relevant Charts and Tables are provided.


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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 25 September 2016 and is provided here for reference purposes:
Strong: USD, JPY, NZD. The preferred range is from 6 to 8.
Neutral: CHF, AUD. The preferred range is from 4 to 5.
Weak: EUR, GBP, CAD. The preferred range is from 1 to 3.

When looking at the Average 13 wks. Score the JPY(Strong) is now the weakest one of the strong currencies but still a lot stronger compared to the Neutral currencies. It succeeded last week to have a Score of 3 and gained 1 point but is still far outside the range of the strong currencies, 6 to 8.
The situation for the GBP(Weak) is almost similar to previous week but it lost 1 point having a Score of 4. The 13W. Average Score is still the lowest of all but now getting close to the CAD(Weak) while the GBP(Weak) has been clearly a lot weaker compared to all the currencies in the last period.

Until now the Classification made on 25 September 2016 is valid for 9 weeks. As it seems it will remain this way for the coming weeks because the distances between the Average 13 wks. Score of the currencies in each Classification are too far from the other Classifications. This can easily be seen by checking the Average 13 wks. Score of the Neutral currencies. These are in the range of 4,4615 and 4,7692 and more than 1 point higher than the Weak currencies. However it is only +/- 0,7 points away from the Strong currencies so the JPY(Strong) seems vulnerable.




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The Strong Currencies

The JPY had a dip in the last period but it recovered with 1 point last week. The USD remained strong and the NZD recovered from the small dip in the previous week. 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.




"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.

  1. First of all only better classified currencies in combination with weaker classified currencies are "Approved" when there is a Currency Score difference of at least 1 in the current week.
  2. The only exception is when 2 currencies are similarly classified but the Currency Score difference is equal to or more than 4.
  3. It means that each currency should be as far apart from each other as possible in the range from 1 to 8. The classification of the currencies in question may change in the longer term. By using the difference of 4 which is exact at the half of the range it seems a safe approach for trading 2 currencies which are similarly classified.
  4. Even though currencies may be in the same classification 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:
USD and NZD
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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:
EUR and AUD.
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 at the moment is e.g. the:
CAD, JPY and AUD.

Some of the pairs in the "Currency Comparison Table" comply for a longer term trade based on the Technical Analysis (TA) of the Daily and Weekly chart. For the coming week these seem to be: EUR/USD, AUD/USD, EUR/CAD, USD/JPY, GBP/USD, AUD/NZD, NZD/JPY, USD/CHF, EUR/CHF, GBP/NZD and USD/CAD.



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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 and Models in practice 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 recommendation to purchase any financial instruments. The choice and risk is always yours. Thank you.