FxTaTrader


Forex Technical Analysis based on experience and research.

Sunday, December 17, 2017

Forex Strength and Comparison Week 51 / 2017

In the Currency Strength table, the NZD was the strongest currency while the CAD was the weakest. There were some significant changes last week with the NZD and AUD gaining 6 points, the JPY 3 points while the USD, EUR, GBP, CHF, and CAD lost 3 points.

The NZD, AUD and to a lesser extent the JPY showed a good performance last week.
The AUD and JPY are Neutral currencies and
may offer some good opportunities against the Weak currencies.
The NZD is a Weak currency and was especially strong against the AUD and CAD. The strength in the NZD seems more like a temporary pullback.

The CAD, and to a lesser extent the CHF and USD, showed a weak performance last week while the EUR and GBP showed a lot of weakness at the end of last week.
The CHF is a Neutral currency and it may offer some good opportunities against the Strong currencies.
The CAD was very Weak last week and more in the range of the Neutral currencies in the 4 weeks before while it is a Strong currency.

Based on:

  • the Classification of each currency as described in this article
  • and the development in the "Currency Strength table" as described above
  • and the "Currency Score Comparison table" which is supplied at the bottom of this article
it seems that going long with the AUD and JPY may offer the best opportunities while going for going short this may be the CHF


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 13 Weeks Currency Score Strength

The 13 Weeks Currency Strength and the 13 Weeks Average are provided here below. For more information check the page Explanation Articles on my blog.



    _____________________________________

    Average 13 wks. Score

    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 could be a currency that will change its classification in the coming weeks. There are no such currencies at the moment.

    • Strong - We can see that the EUR, USD, GBP and CAD are clearly grouped together as Strong currencies around an Average 13 wks. Score of 5 to 7.
    • Neutral - The JPY, AUD and CHF are grouped together around an Average 13 wks. Score of 3 to 4.
    • Weak - The NZD is the only Weak currency with a Score around an Average 13 wks. Score of 2 to 3.


    _____________________________________

    Classification review

    This week we take a look at the Possible reversals. For this we look at the Price in relation to the Ichimoku cloud and the MACD in relation to the zero line in the Daily chart.

    • The NZD showed a lot of Strength last week becoming the strongest currency that week. This was especially the case against the AUD and CAD where it reversed. The strength does not seem to be structural for the moment.
    • The AUD showed a lot of Strength last week too and this was especially against the CAD where it reversed. Also here, the strength does not seem to be structural for the moment.
    • The CAD showed a lot of weakness last week. This is a Strong currency and it reversed against all the major currencies. The Score in the last 5 weeks has not been in the range of Strong currencies. This currency is still a Strong currency based on the Average 13 wks. Score but is now the Weakest currency of the Strong currencies. It may become a Neutral currency within a few weeks if the performance does not improve.
     Below you can see the Weekly Currency Score Chart with the 6 months' data as a reference.




    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 10 December 2017 and is provided here for reference purposes:
    Strong: EUR, USD, GBP and CAD. The preferred range is from 5 to 8.
    Neutral: JPY, AUD and CHF. The preferred range is 2 to 4.
    Weak: NZD. The preferred range is from 1 to 1.



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    Currency Score Comparison

    The Forex Currency Comparison Table compares each currency with its counterpart based on the Currency Score. For more information check the page Explanation Articles on my blog. 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.



    ______________________________________

    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 51 / 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 NZD(4X) followed by the AUD(2X) and the JPY(2X). The weaker currencies are the CAD(5X) followed by the CHF(3X).
    By diversifying a nice combination can be traded in the coming week like e.g.:

    • NZD/CHF with the CAD/JPY
    • AUD/CHF 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 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 10 December 2017 and is provided here for reference purposes:
    Strong: EUR, USD, GBP and CAD. The preferred range is from 5 to 8.
    Neutral: JPY, AUD and CHF. The preferred range is 2 to 4.
    Weak: NZD. The preferred range is from 1 to 1.

    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 lower Time Frames than the 4 Hour chart. 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 CAD/JPY 8 Hour chart and the set-up is a Short Entry.
    Price is clearly in a downtrend and is now gaining momentum and going towards the latest bottom at 86,75 .

    1. A nice sell opportunity would be around the current level and on possible pullback around the Nr. 1 yellow dotted line and the Tenkan-Sen. The yellow dotted line seems to be an important Support/Resistance level. Price should be gaining momentum at the mentioned levels after the possible pullback. Entering at the current level seems a good idea too because it made a pullback already with a recent high of 14 Dec. and there is momentum already. Another pullback may not take place again.
      • The PSAR is positive for entering short trades in the 8H. and Daily chart. Even if it turns negative in the 8H. chart it is in favor of short positions. As it seems for now, it will not turn negative.
      • By preference, the candlesticks should show a good pattern that confirms the entry. This could be e.g. one of the reversal Candlesticks patterns or a continuation pattern. Check e.g. the following links for more information: Bulkowski's Top 10 Reversal Candlesticks , Wikipedia Candlestick pattern or Investopedia Candlestick .
    2. The target should be, depending on the current set-up going long or short, below/above the Nr. 2 yellow dotted line where the latest high/low was made. This may be or become a resistance/support level and closing below/above that level is for that reason a good target.
    3. In case of a stronger pullback with price going far below/above the Nr. 1 yellow dotted support line with the MACD not recovering the set-up is no more valid. A stop-loss should be placed below/above a recent top/bottom. These are levels where Resistance or Support may reside too.
    4. The MACD should show in the right direction strength in the MACD minus Signal, these are the Blue and Red bars. In case of an uptrend, the red bars should become smaller or the blue bars larger. In case of a downtrend, the red bars should become larger or the blue bars smaller. The MACD should stay above/below the zero line.
    • This is a pair that fits best in Point 2 of the Comparison Table Guide. For more information read my other Weekly article called the "Forex Strength and Comparison" and the pages Explanation Articles.
    • The JPY is a Neutral currency and the CAD a Strong currency. The Currency Score Difference is 5.
    The set-up mentioned remains valid as long as the pair remains in the Top 10 of the coming Weekly Ranking and Rating lists and continues to comply with the point of the Comparison Table Guide mentioned above.


    ______________________________________

    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.   

    Sunday, December 10, 2017

    Forex Strength and Comparison Week 50 / 2017

    In the Currency Strength table, the GBP was again the strongest currency while the AUD was the weakest. There were some significant changes last week with the USD gaining 2 points, the JPY and NZD 1 point, the CHF and CAD losing 1 point.

    The GBP and to a lesser extent the USD and EUR showed a good performance during the whole week.
    These are all Strong currencies and fit exactly with the current performance in the Classification and Score.
    The AUD and to a lesser extent the NZD and CAD showed a weak performance during the whole week.
    The NZD is a Weak currency and fits exactly with the current performance in the Classification and Score.
    The AUD is a Neutral currency and does not fit exactly with the current performance in the Classification and Score. However, being Neutral currencies it may offer some good opportunities against the Strong currencies.

    Based on the development as described above it seems that going long with the GBP, USD or EUR against the AUD or NZD may offer good opportunities. If this is being confirmed by the analysis in both of my Weekly articles and the charts are looking in the right direction, these combinations may offer good opportunities.




    ______________________________________

     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.



    _____________________________________

    Average 13 wks. Score

    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 could be a currency that will change its classification in the coming weeks. There are no such currencies at the moment.

    • Strong - We can see that the EUR, USD, GBP and CAD are clearly grouped together as Strong currencies around an Average 13 wks. Score of 5 to 7. after showing a
      • The USD changed classification from Neutral to Strong.
    • Neutral - The JPY, AUD and CHF are grouped together around an Average 13 wks. Score of 3 to 4.
      • The JPY changed classification from Weak to Neutral.
    • Weak - The NZD is the only Weak currency with a Score around an Average 13 wks. Score of 2 to 2,5.



    _____________________________________

    Classification review

    This week we take a look at the Classification changes. The USD has become a Strong currency after showing a good performance in the last 2 weeks. It had 7 times a higher Score in the last 13 weeks than the CAD which is also a Strong currency. The USD is now back to a high Score of 6 which is in the range of the Strong currencies.

    The JPY has become a Neutral currency although the performance was not great last week. The difference between the Score of the NZD compared to the JPY is significant and the JPY has a Score which is more close to the Neutral currencies. In the last 13 weeks, it had 7 times a higher Score than the AUD which is a Neutral currency too.

    Below you can see the Weekly Currency Score Chart with the 6 months' data as a reference.



    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 10 December 2017 and is provided here for reference purposes:
    Strong: EUR, USD, GBP and CAD. The preferred range is from 5 to 8.
    Neutral: JPY, AUD and CHF. The preferred range is 2 to 4.
    Weak: NZD. The preferred range is from 1 to 1.



    _____________________________________

    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 sideways 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:
    GBP, EUR 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:
    AUD, NZD and JPY.
    These are Weak or Neutral currencies from a longer term perspective.


    ______________________________________

    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 50 / 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 GBP(5X) followed by the EUR(3X) and the USD(2X). The weaker currencies are the AUD(3X) followed by the JPY(2X) with the NZD(2X).
    By diversifying a nice combination can be traded in the coming week like e.g.:

    • EUR/AUD with the GBP/NZD
    • GBP/JPY with the AUD/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 10 December 2017 and is provided here for reference purposes:
    Strong: EUR, USD, GBP and CAD. The preferred range is from 5 to 8.
    Neutral: JPY, AUD and CHF. The preferred range is 2 to 4.
    Weak: NZD. The preferred range is from 1 to 1.

    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 lower Time Frames than the 4 Hour chart. 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 the GBP/AUD 8 Hour chart.
    Price is clearly in an uptrend and is now consolidating above the Tenkan-Sen with a possible continuation towards the Kijun-Sen.

    1. A nice buy opportunity would be around the Nr. 1 yellow dotted line and the Tenkan-Sen. The yellow dotted line seems to be an important Support/Resistance level and is also where the Kijun-Sen is currently. Price should be gaining momentum at the mentioned levels after the pullback.
      • The PSAR is positive in the 8H. and Daily chart. Even if it turns negative in the 8H. chart it is in favor of long positions. As it seems, for now, it will not turn negative.
      • By preference, the candlesticks should show a good pattern that confirms the entry. This could be e.g. one of the reversal Candlesticks patterns or a continuation pattern. Check e.g. the following links for more information: Bulkowski's Top 10 Reversal Candlesticks , Wikipedia Candlestick pattern or Investopedia Candlestick .
    2. The target should be below the Nr. 2 yellow dotted line where the latest high was made. This may be or become a support level and closing below that level is for that reason a good target.
    3. In case of a stronger pullback with price going far below the Nr. 1 yellow dotted support line with the MACD not recovering the set-up is no more valid. A stop-loss should be placed below a recent bottom. These are levels where Support or Resistance may reside too.
    4. The MACD should show strength in the MACD minus Signal, these are the Blue and Red bars. In case of an uptrend, the red bars should become smaller or the blue bars larger. In case of a downtrend, the red bars should become larger or the blue bars smaller. The MACD should stay below the zero line.
    • This is a pair that fits best in Point 1 of the Comparison Table Guide. For more information read my other Weekly article called the "Forex Strength and Comparison".
    • The GBP is a Strong currency and the AUD a Neutral currency. The Currency Score Difference is 7.
    The set-up mentioned remains valid as long as the pair remains in the Top 10 of the coming Weekly Ranking and Rating lists and continues to comply with the point of the Comparison Table Guide mentioned above.


    ______________________________________

    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. 

    Wednesday, December 6, 2017

    Forex Strength And Comparison December 2017

    In the Currency Strength table, the EUR was the strongest currency again while the NZD was the weakest. There were some significant changes last month with the CHF gaining 4 points, the GBP 2 points, the USD losing 3 points. The other currencies remained around the same level of last month with a maximum change in the strength of just 1 point.

    The GBP and EUR showed a good performance during the whole month. The EUR is a Strong currency and fits exactly with the current performance in the Classification and Score.

    The NZD and AUD showed a weak performance during the whole month. Both are Neutral currencies and do not fit with the current performance in the Classification and Score. However, being Neutral currencies it may offer some good opportunities against the Strong currencies.

    Based on the development as described above it seems that going long with the EUR against the NZD or AUD may offer good opportunities. If this is being confirmed by the analysis in both of my Monthly articles and the charts are looking in the right direction, these combinations may offer good opportunities.




    ______________________________________

     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.




    _____________________________________

    Average 12 M. Score

    When looking at the Average 12 M.. Score we can see the currencies grouped together according to their classification.

    • Strong - We can see that the USD, EUR and the CAD are clearly grouped together as Strong currencies around an Average 12 M. Score of 5
      • The EUR is the strongest currency and continues to deliver high Scores.
    • Neutral - The AUD, NZD and CHF are grouped together around an Average 13 wks. Score of 4,3.
      • The CHF changed classification from Weak to Neutral.
    • Weak - The GBP and JPY are grouped together around an Average 13 wks. Score of 3,5 to 4.
      • The GBP continues to show a lot of strength with a score of 7 but lost a lot of strength in the previous months. It remains together with the JPY the weakest currency of all based on the Average 12 M. Score.


    _____________________________________
    Classification review

    This month we take a look at the Weak currencies. There is a big difference between both currencies. While the GBP seems to recover, the JPY seems to be weakening. Looking further into the past it is clear to see that it happened also in the year 2016. Back then it stayed that way for a long time. Currently, we will have to see if the conditions will remain the same for a longer time.
    Below you can see the Monthly Currency Score Chart with the 24 months' data as a reference.






    For analyzing the best pairs to trade looking from a longer-term perspective the last 12 months Currency Classification can be used in support.
    The CHF changed classification last month from Weak to Neutral. Here below you can see the new classification.

    New Classification
    This classification was updated on 6 December 2017 and is provided here for reference purposes: 
    Strong: USD, EUR, CAD. The preferred range is from 6 to 8.
    Neutral: AUD, NZD, CHF. The preferred range is from 3 to 5.
    Weak: JPY, GBP. The preferred range is 1 to 2.



    _____________________________________

    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 of 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 sideways 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 "12 Months currency classification" and the "CurrencyComparison Table" the most interesting currencies for going long seem to be the:
    EUR, CHF and CAD.
    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:
    NZD, AUD and JPY.
    These are Weak or Neutral currencies from a longer term perspective.



    ______________________________________

    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 ForexModels" 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 December 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) with the GBP(4X). The weaker currencies are the NZD(4X) followed by the AUD(2X) with the JPY(2X).
    By diversifying a nice combination can be traded in the coming months like e.g.:

    • GBP/NZD with the EUR/JPY
    • EUR/NZD with the GBP/AUD

    ______________________________________

    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-termperspective the last 12 months Currency Classification can be used in support.
    The CHF changed classification last month from Weak to Neutral. Here below you can see the new classification.

    New Classification
    This classification was updated on 6 December 2017 and is provided here for reference purposes: 
    Strong: USD, EUR, CAD. The preferred range is from 6 to 8.
    Neutral: AUD, NZD, CHF. The preferred range is from 3 to 5.
    Weak: JPY, GBP. The preferred range is 1 to 2.

    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 lower Time Frames than the 4 Hour chart. 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 EUR/NZD Weekly chart.

    Price is clearly in an uptrend and made a high lately. It is now consolidating below that level and it is expected to continue to do so towards the Tenkan-Sen. The PSAR will turn negative but it is in favor of long positions and it is in the Monthly chart still positive too.

    1. A nice buy opportunity would be near the Tenkan-Sen and the Nr. 1 yellow dotted line which seems to be a good support. By preference the candlesticks should show a good pattern that confirms the entry. This could be the Engulfing pattern, Morningstar etc. etc. Check e.g. the following link for more information: Bulkowski's Top 10 Reversal Candlesticks. 
    2. The target should be below the latest recent high where the Nr. 2 yellow dotted line is.
    3. The MACD should show strength in the MACD minus Signal, these are the Blue and Red bars. Either the red bars should become shorter or the blue bars larger. The MACD should stay above the zero line.
    In case of a stronger pullback with price going far below the yellow dotted support line with the MACD not recovering the set-up is no more valid. A stop-loss should be placed below a recent bottom and/or Support/Resistance line.
    • This is a pair that fits best in Point 1 of the Comparison Table Guide. For more information read my other Monthly article called the "Forex Strength and Comparison".
    • The EUR is a strong currency and the NZD a Neutral currency. The Currency Score Difference is 7.
    The set-up mentioned remains valid as long as the pair remains in the Top 10 of the coming Monthly Ranking and Rating lists and continues to comply with the point of the Comparison Table Guide mentioned above.


    ______________________________________

    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.

    Monday, December 4, 2017

    Forex Strength and Comparison Week 49 / 2017

    In the Currency Strength table, the GBP was the strongest currency while the NZD was again the weakest. There were some significant changes last week with the USD, GBP, AUD  and CAD gaining 1 point, the JPY losing 3 points and the EUR  losing 1 point.

    The GBP showed a good performance during the whole week and a very strong performance at the end of the week. The CAD and CHF showed a very strong performance at the end of the week and the EUR a steady and strong performance during the whole week.
    The GBP, EUR and CAD are Strong currencies and fit exactly with the current performance in the Classification and Score. The CHF is a Neutral currency and does not fit exactly with the current performance in the Classification and Score. However, being a Neutral currency it may offer some good opportunities against the Weak currencies.

    The USD, CAD, AUD and NZD showed a weak performance during the whole week.
    The NZD is a Weak currency and fits exactly with the current performance in the Classification and Score.
    The USD and AUD are Neutral currencies and do not fit exactly with the current performance in the Classification and Score. However, being Neutral currencies it may offer some good opportunities against the Strong currencies.

    Based on the development as described above it seems that going long with the EUR or GBP against the NZD, USD or AUD may offer good opportunities. If this is being confirmed by the analysis in both of my Weekly articles and the charts are looking in the right direction, these combinations may offer good opportunities.




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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.



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    Average 13 wks. Score

    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 could be a currency that will change its classification in the coming weeks. There are no such currencies at the moment.

    • Strong - We can see that the EUR, GBP and CAD are clearly grouped together as Strong currencies around an Average 13 wks. Score of 5,5 to 7. after showing a
      • The EUR is the strongest currency and continues to deliver high Scores.
    • Neutral - The USD, AUD and CHF are grouped together around an Average 13 wks. Score of 3,5 to 4,5.
    • Weak - The JPY and NZD are grouped together around an Average 13 wks. Score of 2 to 3.

    _____________________________________

    Classification review

    This week we take a look at the Classification changes. The CHF has become a Neutral currency after showing a good performance in the last 3 weeks.
    The GBP showed even a better performance during the last 4 weeks and has become a Strong currency. We can see in the chart the strong performance of both currencies.
    Below you can see the Weekly Currency Score Chart with the 6 months' data as a reference.

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


    _____________________________________

    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 sideways 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:
    GBP, EUR and CHF.

    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:
    NZD, JPY 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. This week there are none.


    ______________________________________

    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 49 / 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) with the GBP(4X). The weaker currencies are the NZD(4X) followed by the AUD(2X), JPY(2X) and USD(2X).
    By diversifying a nice combination can be traded in the coming week like e.g.:
    • EUR/NZD with the GBP/AUD
    • EUR/JPY with the GBP/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 3 December 2017 and is provided here for reference purposes:
    Strong: EUR, GBP and CAD. The preferred range is from 6 to 8.
    Neutral: USD, AUD and CHF. The preferred range is 3 to 5.
    Weak: JPY and NZD. The preferred range is from 1 to 2.

    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 lower Time Frames than the 4 Hour chart. 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 CurrencyScore, 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 the GBP/JPY 4 Hour chart.
    Price is clearly in an uptrend and is now consolidating around the Tenkan-Sen with a possible continuation towards the Kijun-Sen.
    1. A nice buy opportunity would be around the Nr. 1 yellow dotted line and the Kijun-Sen. The yellow dotted line seems to be an important Support/Resistance level.
    2. The target should be below the Nr. 2 yellow dotted line where the latest high was made. This may be or become a support level and closing below that level is for that reason a good target.
    3. In case of a stronger pullback with price going far below the Nr. 1 yellow dotted support line with the MACD not recovering the set-up is no more valid. A stop-loss should be placed below a recent bottom. These are levels where Support or Resistance may reside too.
    4. The MACD should show strength in the MACD minus Signal, these are the Blue and Red bars. In case of an uptrend, the red bars should become smaller or the blue bars larger. In case of a downtrend, the red bars should become larger or the blue bars smaller. The MACD should stay below the zero line.
    • This is a pair that fits best in Point 1 of the Comparison Table Guide. For more information read my other weekly article called the "Forex Strength and Comparison".
    • The GBP is a Strong currency and the JPY a Weak currency. The Currency Score Difference is 6.
    The set-up mentioned remains valid as long as the pair remains in the Top 10 of the coming Weekly Ranking and Rating lists and continues to comply with the point of the Comparison Table Guide mentioned above.


    ______________________________________

    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 ForexModels" 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.