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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
weekly analysis on my strategy
and the Forex ranking and rating list which is available 3 times a week
on this blog.
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.
According to the Ranking and Rating list already published this weekend
the following pair combinations look interesting. The CHF is still
being avoided because the daily charts are not yet good to interpret
because
of the heavy price movement when the EUR/CHF floor was taken away.
The technical analysis is the most important issue to consider
before taking positions. The Weekly Chart is being 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.
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.
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.
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. See for more information the article: Weekly Currency Score Wk03 where
the charts are available. There are no changes since week 03 and the
currencies are
classified for the coming weeks as follows:
- Strong: CHF / USD / NZD
- Average: GBP /CAD
- Weak: EUR / JPY / AUD
The GBP has developed very strong in the last weeks and may move from an average to a strong classsification.
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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 GBP is having a score of 6 and the CHF a score of 4. A strong currency should have by preference a score of 6 or higher and an average currency a score of 4 or 5. The GBP is getting stronger lately and switched places with the CHF last week. The conclusion is:- Most of the currencies are at the right level except for the GBP which is a point higher and the CHF which is 2 points lower
- There is a light pullback at the moment for the CHF when looking at the market as a whole.
- The pairs that we may look at are all most
probably trending except for the CHF long which are most probably ranging.
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Currency
Score difference
- EUR/USD with the GBP/AUD
- EUR/NZD with the AUD/USD
- USD/JPY with the EUR/GBP
- GBP/JPY with the EUR/USD
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- The EUR/USD is clearly in a downtrend and nicely within the Bollinger Band.
- The EUR/NZD looks like it is picking up the downtrend again and is clearly within the Bollinger Band.
- The USD/JPY looks like it is picking up the uptrend again and is clearly within the Bollinger Band.
- The GBP/JPY looks like it is picking up the uptrend again and is clearly within the Bollinger Band.
- The EUR/GBP is clearly in a downtrend and nicely within the Bollinger Band.
- The AUD/USD is clearly in a downtrend and nicely within the Bollinger Band.
- The GBP/AUD is clearly in an uptrend 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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