Forex Currency Score for Week 44 / 25-October-2015

The Currency Score analysis is one of the parameters used for the Ranking and Rating list which was published earlier this weekend. Besides this analysis and the corresponding chart I also provide the Forex ranking and rating list.

It is recommended to read the page Currency score explained and Models in practice for a better understanding of the article. This article will provide 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 2 screenshots in this article showing the Currency Score and the Currency Score Difference.

 Last 3 months currency classification

The last 3 months currency classifications from a longer term perspective are provided for reference purposes. The necessary charts can be found in the previous article Weekly Currency Score Wk34. The currencies are classified for the coming weeks as follows:

• Strong: GBP / USD / CHF. The preferred range is from 6 to 8.
• Average: EUR / JPY. The preferred range is from 4 to 5.
• Weak: NZD / AUD / CAD. The preferred range is from 1 to 3.

The NZD is very strong lately with the classification of a weak currency so it will be considered an average currency if it remains this way in the coming weeks.
The EUR, CHF and JPY are also in question but the current classification fits best until now.

Currency Score

For analyzing the best pairs to trade the last 3 months currency classification is the first issue. When looking at the most recent score that is used for the coming period we can see in the screenshot below the deviations and we can come to certain conlcusions. These are explained below the screenshot.

Deviations strong currencies

• The CHF has a score of 2. This is a strong currency and it should have by preference a score from 6 or 8. It has a score at the moment of a weak currency.

Deviations average currencies

• The EUR has a score of 1. This is an average currency and it should have by preference a score from 4 to 5. It has a score at the moment of a weak currency.

Deviations weak currencies

• The NZD has a score of 7. This is a weak currency and it should have by preference a score from 1 to 3. It has a score at the moment of a strong currency.
• The AUD has a score of 4. This is a weak currency and it should have by preference a score from 1 to 3. It has a score at the moment of an average currency.

The conclusions are:

• Half of the currencies are at the right level when looking at the last 3 months currency classification. These are the USD, GBP, JPY and CAD.

Conlusion strong currencies

• There is most probably a pullback for the CHF when looking at the market as a whole. The uptrend has lost momentum.

Conlusion average currencies

• There is a decrease of momentum for the EUR which is getting weaker.

Conlusion weak currencies

• There is most probably a pullback for the AUD and the NZD when looking at the market as a whole. The downtrend has lost momentum.

Conclusion summary:

• The weak currencies against the EUR are most probably ranging. 
• The CHF, AUD and NZD may offer a good opportunity to step in. However, it is important to determine if the specific pair is indeed having a pullback. For that reason it is good to see the momentum returning in that pair, check the "Ranking and Rating list". If there is momentum then check also the"Currency score difference" table.
• All the other pairs may be in a trend when complying to the "Currency score difference" table which can be seen here below.

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According to the Ranking and Rating list already published this weekend the following pair combinations look interesting:

• EUR/USD with the GBP/CAD
• GBP/CHF with the USD/CAD
• EUR/GBP with the USD/CHF

When looking at the Currency Score Table here below for this week we can see the currency score differences. The interesting pairs should have by preference a score difference of 4 or higher when they are similarly classified. Or the better classified pair should have a higher score than the counterpart. All the pairs mentioned above comply for trading in the coming week. The Currencies are colored Green, Orange and Red resp. by the classification they have. This way it is easier to see what currencies should have a certain score difference.


The technical analysis is the most important issue to consider before taking positions. The Weekly Chart is analyzed. I prefer the Bollinger Band for defining where a pair is in the chart. Once a pair is outside a Bollinger Band it is in a strong trend which can cause a strong pullback. Although this may be a good opportunity for other analysts I avoid taking positions because of the possible unexpected strong pullback. Positions are only opened inside the Bollinger Band and this may be at the start of a possible trend or on a good pullback in an existing trend.

• The EUR/USD is in a downtrend and within the Bollinger Band.
• The GBP/CAD is in an uptrend and within the Bollinger Band.
• The GBP/CHF  is in an uptrend and within the Bollinger Band.
• The USD/CAD is in an uptrend and within the Bollinger Band.
• The EUR/GBP is in a downtrend and within the Bollinger Band.
• The USD/CHF is in an uptrend and within the Bollinger Band.

When trading according to the FxTaTrader Strategy some rules are in place. For more information see the page on my blog FxTaTrader Strategy. Depending on the opportunities that may come up the decision to trade a currency may become more obvious at that moment. 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 recommendation to purchase any financial instruments. The choice and risk is always yours. Thank you.