Forex Technical Analysis based on experience and research.

Sunday, August 13, 2017

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


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.


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.


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.


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.