FxTaTrader


Forex Technical Analysis based on experience and research.

Monday, January 15, 2018

Forex Strength and Comparison Week 3 / 2018

In the Currency Strength table, the NZD was the strongest currency while the USD was the weakest. There were some significant changes last week with the JPY gaining 5 points while the CAD lost 4 points.

On a week to week basis the NZD and AUD showed a very good performance while the USD and to a lesser extent the JPY and CHF showed a very weak performance. When looking at the development at the end of last week, the NZD 
and to a lesser extent the AUD continued to perform very well.On the other hand, the USD remained weak and so did the CHF.
The EUR remained Neutral last week and ended with a Score of 5. It is the highest Score from the group of Strong currencies and seems for that reason the best one from this group for the coming week.

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. We will look at this in more detail.




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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. Such a currency seems to be the CAD.

  • Strong - We can see that the EUR, GBP and CAD are clearly grouped together as Strong currencies around an Average 13 wks. Score of 4,8 to 7.
  • Neutral - The USD and AUD are grouped together around an Average 13 wks. Score of 4 to 4,5.
  • Weak - The JPY, NZD and CHF are grouped together around an Average 13 wks. Score of 3,2 to 3,7.

The CAD showed some weakness last week with a low Score of 3. The Avg. 13 wks. is currently very low for a Strong currency compared to the other Strong currencies. The
The Avg. 13 wks. is close to the AUD, which is a Neutral currency.



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Classification review

This week we take a look at the Deviations.

  • The NZD and AUD showed in the last 4 weeks a lot of strength. The NZD is a weak currency and does not seem to become a Neutral or Strong currency in the coming period. The AUD, on the other hand, is a Neutral currency and if it keeps performing this well it may become a Strong currency in the coming period.
  • The USD showed a weak performance in the last 4 weeks. Although it seems to remain a Neutral currency for the moment, it is not that far from the strongest currency in the group of Weak currencies, which is the JPY.
 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 and EUR may offer the best opportunities.
For going short, the USD and to a lesser extent the CHF and JPY seem to offer good opportunities.
The CAD 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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