When looking at the Top 10 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(4X) followed by the USD(3X) and the NZD(2X). The weaker currencies are the GBP(4X) followed by theCAD(3X) and the AUD(2X).
A nice combination for coming week may be e.g:
- GBP/JPY with the AUD/USD
- GBP/USD with the NZD/CAD
- GBP/NZD with the CAD/JPY
- AUD/JPY with the USD/CAD
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 other currencies.
Ranking and Rating list
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.
This was updated on 7 August 2016 and is provided here for reference purposes:
Strong: USD, JPY, NZD. The preferred range is from 6 to 8.
Average: CHF, AUD, CAD. The preferred range is from 3 to 5.
Weak: EUR, GBP. The preferred range is from 1 to 2.
When comparing the 13 weeks 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.
Currency Score ChartThe 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 13 weeks 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. A good example at the moment is e.g. the EUR. Unless this currency shows a clear opportunity based on the longer term it should be 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 that article 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.