FxTaTrader


Forex Technical Analysis based on experience and research.

Sunday, January 7, 2018

Forex Strength and Comparison Week 2 / 2018

In the Currency Strength table, the NZD was the strongest currency while the JPY was the weakest. There were some significant changes last week with the NZD gaining 4 points while the EUR, GBP, AUD and CAD lost 1 point.

On a week to week basis the NZD, AUD and to a lesser extent the CAD showed a very good performance while the USD, JPY and to a lesser extent the GBP showed a very weak performance. When looking at the development at the end of last week, the NZD, AUD and CAD continued to perform very well and the EUR  showed a good performance too.
On the other hand, the USD and JPY remained weak and so did the GBP and CHF.

Although some good performing currencies may have lost points they remain interesting when looking at all the currencies in the table as a whole. Same for the weak currencies that may have gained points. That is why the Classification of currencies and the Currency Score comparison are important also.

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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.

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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 to 7.
  • Neutral - The USD and AUD are grouped together around an Average 13 wks. Score of 4 to 4,7.
  • Weak - The JPY, NZD and CHF are grouped together around an Average 13 wks. Score of 2,7 to 3,7.

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Classification review

This week we take a look at the Classification changes.

  • The USD showed in the last 3 weeks weakness. It performed very well in the weeks before and changed Classification from Strong to Neutral.
  • The JPY and CHF showed a weak performance in the last 4 weeks. It did not perform very well in the weeks before and changed Classification from Neutral to Weak.
 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 7 January 2018 and is provided here for reference purposes:
Strong: EUR, GBP and CAD. The preferred range is from 6 to 8.
Neutral: USD and AUD. The preferred range is 4 to 5.
Weak: JPY, NZD and CHF. The preferred range is from 1 to 3.



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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.



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Putting the pieces together

Based on the analysis of this article it seems that going long with the AUD, CAD and to a lesser extent with the EUR may offer the best opportunities.
For going short the JPY, USD and to a lesser extent the CHF seem to offer good opportunities.
The GBP is a Strong currency and for that reason, it seems not the best one to go short with even though it showed a Weak or Neutral performance last week.

The NZD is a Weak currency and for that reason, it seems not the best one to go long with even though it showed a Strong or Neutral performance last week.


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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", "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.

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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 a recommendation to purchase any financial instruments. The choice and risk are always yours. Thank you.