Forex Technical Analysis based on experience and research.

Sunday, February 4, 2018

Forex Strength And Comparison February 2018

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

On a month-to-month basis the GBP and EUR showed a very good performance and to a lesser extent the AUD and CAD.
The USD and JPY showed a very weak performance and to a lesser extent the NZD.

When looking at the development at the end of last month, the GBP and EUR kept performing very well and to a lesser extent the CHF gained some strength too. On the other hand, the USD and JPY kept performing very weak and to a lesser extent the CAD lost some strength too.
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.


 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. Such currencies are the USD, GBP and NZD, these changed classification last month.
  • Strong - We can see that the EUR, GBP, AUD and CAD are clearly grouped together as Strong currencies around an Average 12 M. Score of 4,6 to 6,1.
  • Neutral - The USD and CHF are grouped together around an Average 12 M. Score of 4,2 to 4,3.
  • Weak - The JPY and NZD are grouped together around an Average 12 M. Score of 3,6 to 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 5 months and is currently the strongest currency. It changed classification from Neutral to Strong.
The USD was a Strong currency and is now a Neutral Currency based on the weaker performance in the last 2 months.
The NZD showed such a weak performance in the last 6 months that it is now a Weak currency coming from being a Neutral currency.
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 4 February 2018 and is provided here for reference purposes: 

Strong: EUR, GBP, AUD, CAD. The preferred range is from 5 to 8.
Neutral: USD, CHF. The preferred range is from 3 to 4.
Weak: JPY, NZD. The preferred range is 1 to 2.


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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