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
classifications 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 the following deviations:- The USD has a score of 3 and the NZD a score of 5. These are the strong currencies and they should have by preference a score of 6 or higher. They have a score at the moment of an average currency.
- The CAD has a score of 7 and the CHF a score of 6. These are average currencies and they should have by preference a score from 3 to 5. They have a score at the moment of a strong currency.
- The JPY has a score of 2. This is also an average currency and it should have by preference a score from 3 to 5. It has a score at the moment of a weak currency.
- The AUD has a score of 4. This is a weak currency and it should have by preference a score of 1 or 2. It has a score at the moment of an average currency.
- Only the EUR and the GBP are at the right level when looking at the last 3 months currency classification.
- There is a strong pullback at the moment for the USD when looking at the market as a whole.
- There is a light pullback for the NZD and the AUD when looking at the market as a whole.
- There is an increase of momentum for the CHF and the CAD that are getting stronger and for the JPY that is getting weaker.
- The pairs that we may look at are all most
probably ranging except for the pairs with the EUR and
GBP which are
most probably trending.
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Currency
Score difference
- EUR/GBP with the CAD/JPY
- EUR/CAD with the GBP/JPY
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 EUR/GBP is in a downtrend and within the Bollinger Band.
- The CAD/JPY is neutral and and for that reason not interesting.
- The EUR/CAD is in a downtrend and within the Bollinger Band.
- The GBP/JPY is neutral and for that reason not interesting. The pair may get in an uptrend in the Weekly chart after coming week.
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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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.