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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
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.
Deviations strong currencies
The conclusions are:
According to the Ranking and Rating list already published this weekend the following pair combinations look interesting:
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.
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 is 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 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.
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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.
- 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.
- 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.
- There is most probably a pullback for the CHF when looking at the market as a whole. The uptrend has lost momentum.
- There is a decrease of momentum for the EUR which is getting weaker.
- 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.
- 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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Currency
Score difference
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
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- 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.
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