Forex Technical Analysis based on experience and research.

Wednesday, January 3, 2018

Forex Strength And Comparison January 2018

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

On a month to month basis the GBP and CAD showed a very good performance while the USD and JPY showed a very weak performance. When looking at the development at the end of last month, the GBP and CAD continued to perform very well and the EUR  and AUD showed a good performance too.
On the other hand, the 
USD and JPY remained weak and so did the CHF.
Based on this and the analysis of this article it seems that going long with the GBP or CAD and to a lesser extent with the EUR or AUD may offer the best opportunities. For going short the JPY offers a good opportunity. The USD is a Strong currency and for that reason, it seems not the best one to go short with even though it showed a weak performance last month. The CHF however, seems a good currency to go short with based on the Currency Score and weak performance of last month.


 12 Months Currency Score Strength

The 12 Months Currency Strength and the 12 Months Average are provided here below. For more information check the page Explanation Articles on my blog.


Average 12 M. Score

When looking at the Average 12 M. 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 months. There are no such currencies at the moment.
  • Strong - We can see that the USD, EUR, AUD and CAD are clearly grouped together as Strong currencies around an Average 12 M. Score of 4,7 to 5,7.
  • Neutral - The GBP, CHF and NZD are grouped together around an Average 12 M. Score of 4.
  • Weak - The JPY is the only Weak currency with a Score around an Average 12 M. Score of 3,7.


Classification review

This month we take a look at the Classification changes. As can be seen, the GBP showed a very good performance in the last 4 months and is currently the strongest currency. The AUD was a Neutral currency and is now a Strong Currency. However, the recovery seems fragile with only one good month lately with a Score of just 5. Based on the Avg. 12 M. it fits best in the group of Strong currencies but it is the weakest one of all the Strong currencies.
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.
This classification was updated on 3 January 2018 and is provided here for reference purposes: 
Strong: USD, EUR, AUD, CAD. The preferred range is from 5 to 8.
Neutral: AUD, NZD, GBP. The preferred range is from 2 to 4.
Weak: JPY, GBP. The preferred range is 1.


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 month, you can read the article "Forex Ranking, Rating and Score" which is published every month together with this article.


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

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


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