Forex Technical Analysis based on experience and research.

Wednesday, September 6, 2017

Forex Metrics and Chart Month September 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 CAD(3X) with the AUD(3X) and EUR(3X). The weaker currencies are the GBP(4X) followed by the NZD(3X) with the JPY(3X).
By diversifying a nice combination can be traded in the coming month like e.g.:

  • GBP/CAD with the EUR/NZD
  • EUR/GBP with the NZD/CAD


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 3 September 2017 and is provided here for reference purposes: 
Strong: USD, NZD, AUD. The preferred range is from 6 to 8.
Neutral: EUR, JPY, CAD, CHF. The preferred range is from 2 to 5.
Weak: GBP. The preferred range is from 1 to 1.

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.


Chart of the Month

The Chart for this month is the AUD/JPY Weekly chart.
Price is in an uptrend and consolidating in the last weeks around the latest high. This may continue for a few more weeks and this offers an opportunity to enter at a good support level. The PSAR is not yet pointing for taking long positions and the MACD Minus Signal (Blue and Red bars) is showing weakness because of the consolidation phase. Price is below the Tenkan-Sen and may continue to go down at the level where the Kijun-Sen is.
  1. A nice buy opportunity would be on pull back around the Kijun-Sen. There is a yellow dotted line at 85,82 which connect several Open / Close / High and Lows of the recent period, this seems to be a good support level. There is a range between the Kijun-Sen and the support level of (+/- 40 pips) where a good entry can be placed.
  2. A safe and realistic profit level would be below the last highest Open and Close where the yellow dotted line is at 88,18.
  3. The MACD should be 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 MACD Minus Signal (Blue and Red bars).

The Daily chart may offer good information for the entry price. There is a range of +/- 230 Pips between the entry discussed in point 1 and the profit level discussed in point 2.

  • This is a pair that fits best in Point 1 of the Comparison Table Guide which you can also read here below.
    • 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.
  • The AUD is a Strong currency and the JPY a Neutral currency, the Currency Score Difference is +3.
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.