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 are the 2 screenshots in this article showing the Currency Score and the Currency Score Difference.
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Last 3 months currency classification
The last 3 months currency
classification from a longer term
perspective
are provided for reference
purposes. The necessary charts can be found in the previous
article Weekly Currency Score Wk11.
The
currencies are
classified for the coming weeks as follows:
- Strong: USD / NZD / GBP. The preferred range is from 6 to 8.
- Average: CAD / CHF / JPY. The preferred range is from 3 to 5.
- Weak: EUR / AUD. The preferred range is from 1 to 2.
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Currency Score
For analyzing the best pairs to trade this 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 that the CHF is having a score of 8 and the GBP a score of 4. A strong currency should have by preference a score of 6 or higher and an average currency a score from 3 to 5. The CHF is getting stronger lately and switched places with the GBP.We can also see that the CAD is having a score of 1 and the AUD a score of 3. A weak currency should have by preference a score of 2 or lower and an average currency a score of 3, 4 or 5. The AUD has got stronger last week and switched places with the CAD.
The conclusion is:
- Most of the currencies are at the right level except for the following combinations. The CHF is 3 points higher and the GBP is 2 points lower, the AUD is a point higher and the CAD is 2 points lower.
- There is a strong pullback at the moment for the GBP when looking at the market as a whole.
- There is a light pullback at the moment for the AUD when looking at the market as a whole.
- There is significant increase of momentum for the CHF which is getting stronger.
- There is some increase of momentum for the CAD which is getting weaker.
- The pairs that we may look at are all most
probably trending except for the pairs with the GBP and AUD
which are
most probably ranging.
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Currency
Score difference
- CAD/CHF with the AUD/USD
- EUR/USD with the AUD/CHF
- NZD/CAD with the AUD/USD
- USD/CAD with the EUR/NZD
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.
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- The CAD/CHF is in a downtrend and within the Bollinger Band. The downtrend is resuming.
- The AUD/USD is in a downtrend and nicely within the Bollinger Band.
- The EUR/USD is in a downtrend and nicely within the Bollinger Band.
- The AUD/CHF is in a downtrend and within the Bollinger Band. The downtrend is resuming.
- The NZD/CAD is in an uptrend and nicely within the Bollinger Band.
- The USD/CAD is in an uptrend and nicely within the Bollinger Band.
- The EUR/NZD is in a downtrend and nicely 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.
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