The Currency Score analysis is one of the parameters used for the Ranking and Rating list which was published already this weekend. The favorite pairs in the Top 10 of this list are being analyzed in more detail here. This article will provide my analysis and the FxTaTrader Currency Score chart which is my view 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. See for full details the page Currency score explained on my blog FxTaTrader.com.
The interesting pairs also discussed in the Forex Ranking and Rating list of this weekend are:
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[li]The EUR/USD which is a weaker currency against a stronger currency with a currency score difference of (2-8=) -6.[/li][li]The AUD/USD which is an average performing currency against a stronger currency with a currency score difference of (3-8=) -5.[/li][li]The GBP/AUD which is a stronger currency against an average performing currency from a longer term perspective with a currency score difference of (7-3=) -4.[/li][li]The EUR/GBP which is a weaker currency against a stronger currency with a currency score difference of (2-7=) -5.[/li][/ul]
All the combinations comply to the guide lines which define what type of currency, strong/average/weak, can be traded against the other. Besides this the currency score difference is significant for these pairs and they support this view. For more information continue reading this article.The FxTaTrader Forex Currency Score chart is meaningful data for my FxTaTrader Hybrid Grid strategy. Besides this chart I also provide my weekly analysis on my strategy and the Forex ranking and rating list which is available 3 times a week on this blog.
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[li]Like in the article of previous weekend the currency score almost did not change compared to last week except this time for the AUD and NZD, they switched places.[/li][li]The USD, GBP and CAD are currently the stronger currencies. The EUR, JPY and AUD are the weaker currencies. The best pairs to look at are a combination of those currencies.[/li][li]Currencies with a score of 4 and 5, meaning the CHF and the NZD are difficult to trade because they are in the middle of the range.[/li][li]Conclusion for going long is that for the coming week it seems best to go long with the USD, GBP and the CAD. However the CAD is an average performer from a longer term perspective so it does not have the preference.[/li][li]For the weaker currencies the conclusion is that for the coming week it seems best to go short with the EUR, JPY and AUD. The JPY was an average performer from a longer term perspective but the last top in the currency score chart was not higher than score 5 and it went down again to a score of 1 in less than 3 months. It seems like this currency is becoming one of the weaker ones for the coming period.[/li][li]The best combinations for the coming week also according to the Top 10 in the Forex Ranking and Rating list and the TA charts are the USD/JPY, GBP/JPY, EUR/USD, AUD/USD, CAD/JPY, GBP/AUD, EUR/GBP and the EUR/CAD.[/li][/ul]
There are some rules for taking positions according to the FxTaTrader Hybrid Grid Strategy. The strategy can open multiple positions of a currency pair but each currency may only be present once in the pairs chosen for trading. It means that not all the possible positions of coming week can be opened. For more information see FxTaTrader Hybrid Grid Strategy.
Another rule is that a pair outside the Bollinger Band in the Weely chart is considered overbought/oversold. No positions are taken for these pairs which are in this case the JPY pairs.
Last week (pending) orders were placed for the EUR/GBP and the NZD/USD with profit 2x EUR/GBP and 2x NZD/USD. More on this in my strategy article later this day.___________________________________________
In the previous weeks we looked into the weaker, stronger and average performing currencies from a longer term perspective using the data of the Currency Score. We also looked into the Currency Score difference. The conclusion was briefly:
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[li]a stronger currency can be traded against a weaker and average performing currency.[/li][li]a weaker currency against a stronger and average performing currency.[/li][li]the average performing currencies can be traded against the stronger and weaker currencies.[/li][li]only trade the average performing currencies against each other when a clear trend is being developed. The currency Score difference may support this view.[/li][/ul]
For more information the article Currency score explained explains in full detail how the currency score is being generated. In my previous articles various aspects have been analyzed as described above. Read the articles of your preference by clicking the links here below, the subjects handled are:
The weaker currencies
The stronger currencies
How to trade the average performing currencies
Using the Currency Score difference for trading decisions
Later on this day I will provide the weekly review on my FxTaTrader Hybrid Grid strategy. Good luck to all and have a great trading week.
Although the explanation may seem simple and clear there is always risk involved. I added a disclaimer to my blog for this purpose. If you like to use this article then mention the source by providing the URL www.FxTaTrader.com or the direct link to this article.