We will be looking this week at the Top 15 because otherwise the only strong currency would be the JPY and the only weak currency the GBP.
When looking at the Top 15 in the Weekly Ranking and Rating list we can see that for the coming week the following stronger currencies are well represented for going long: JPY(7X) followed by the NZD(3X) and the USD(2X). The weaker currencies are the GBP(6X) followed by theEUR(3X) and the CAD(2X).
A nice combination for coming week may be e.g:
- GBP/JPY with the NZD/CAD
- GBP/USD with the EUR/NZD
- GBP/NZD with the EUR/JPY
- EUR/USD with the CAD/JPY
When trading with more than 2 micro lots it is a good idea to have a diversification and depending on your bias it may offer opportunities by going long or short on a specific currency trading it against different other currencies.
Analysis based on TA charts for all the major currency pairs. Good luck to all. No advice, just info. Every week the Forex ranking rating list will be prepared in the weekend. All the relevant Time Frames will be analyzed and the ATR and Pip value will be set.
For analyzing the best pairs to trade looking from a longer term perspective the last 3 months Currency Classification can be used in support.
This was updated on 26 June 2016 and is provided here for reference purposes:
Strong: USD, JPY, NZD. The preferred range is from 6 to 8.
Average: EUR, CHF, CAD. The preferred range is from 4 to 6.
Weak: AUD, GBP. The preferred range is from 1 to 2.
When comparing the 3 months Currency Classification with the pairs mentioned in the Ranking List above some would then become less interesting. On the other hand these pairs are at the top of the list partly also because of their volatility. It seems best to take positions for a short period then and take advantage of the high price movements.
With the FxTaTrader Strategy these pairs are not traded because these would be trades in the 4 Hour chart or in a lower Time Frame. Nevertheless they may offer good chances for the short term trader.
The Currency Score analysis is one of the parameters used for the Ranking and Rating list which is published also in this article. The Currency Score is 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 screenshot here below.
When comparing the 3 months Currency Classification with the recent Currency Score, as provided in the image above, we can determine the deviations. In the article "Forex Strength and Comparison" this is analyzed in more detail. Currencies with a high deviation seem less interesting to trade because they are less predictable. These currencies are at the moment e.g. the EUR and the AUD. Unless these currencies offer a clear opportunity based on the longer term they are avoided.
Besides this article I also use the Forex "Strength and Comparison" which is also available once a week on my blog at FxTaTrader.com. In the article "Ranking, Rating and Score" we look in more detail at the relative position of the currencies and pairs. We will look in more detail at the interesting pairs from a longer term perspective for trading in the Daily and Weekly chart. We will use the information from this article, "Ranking, Rating and Score", and analyze it further in more detail.
It is recommended to read the page Currency score explained and Models in practice for a better understanding of the article. 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.