[I]In the Currency Strength table the [/I][B][I]AUD[/I][/B][I] was again the strongest currency [/I][I]while the [/I][B][I]GBP[/I][/B][I] was the weakest. [/I][I]The [B]JPY[/B] [/I][I]gained 3 points last week[/I][I]. [/I][I]All the other Currencies remained around the level of the previous week with a maximum difference of just 1 point.
[/I]For more details read my full article “Forex Strength and Comparison for Week 8 / 2017” where the relevant Charts and Tables are provided.
[B]13 Weeks Currency Score Strength[/B]
The 13 Weeks Currency Strength and the 13 Weeks Average are provided here below. This data and the “13 weeks Currency Classification” are considered for deciding on the preferred range. Because it is not ideal nor desired to change the range for a currency every single week, we perform several checks to avoid this.
[ol]
[li]First of all the strength over a period of the last 13 weeks is considered. See each row for more information.[/li][li]Next the 13 weeks average is considered, see the last row called “Avg. 13 wks.”[/li][li]The number of weeks that a currency was stronger than another currency can also be considered.[/li][li]The Technical Analysis (TA) Charts for each Time Frame could also be consulted.[/li][/ol]
For analyzing the best pairs to trade looking from a longer term perspective the last 13 weeks Currency Classification can be used in support.
[I]This was updated on 12 February 2017 and is provided here for reference purposes: [/I]
[B][I]Strong: USD, NZD, CAD. The preferred range is from 6 to 8.[/I][/B]
[B][I]Neutral: CHF, AUD. The preferred range is from 4 to 5.[/I][/B]
[B][I]Weak: JPY, EUR, GBP. The preferred range is from 1 to 3.[/I][/B]
[B][/B][I]When looking at the Average 13 wks. Score the [B]USD[/B] remains the strongest of all while the [B]EUR[/B]remains the weakest. The currencies are grouped together around a level which makes clear to what classification they fit best.[/I][I]For some currencies this may not be very clear, a good example at the moment is the [B]AUD[/B] being a Neutral currency but having an [/I][I]Average 13 wks. score of 5,2308 being between the Strong and Neutral currencies.[/I][I]
This currencyis gaining a lot of strength in the last 3 weeks and is clearly the strongest of the Neutral currencies, which are the [B]CHF and AUD[/B]. [/I]
[B]
The Weak Currencies[/B]
[I]
The [/I][B][I]JPY [/I][/B][I]is gaining strength lately and seems to be bottoming. It had a Score of 5 in week 3. After that it went lower again but in the last 3 weeks the lowest Score was 4 and it is currently at 7. The [B]EUR[/B] and [B]GBP[/B] clearly remain very weak.[/I] The JPY is the strongest currency among the Weak currencies with an [I]Average 13 wks. Score[/I] of 2,9231. [B][I]Below you can see the Weekly Currency Score Chart with the 6 months data as a reference.[/I][/B]
[B]Putting the pieces together[/B]
Based on the last “13 Weeks currency classification” and the “Currency Comparison Table” the most interesting currencies for going long seem to be the[I]:
[B]AUD, CAD and USD[/B][/I].
These are [I]Strong or Neutral currencie[/I]s from a longer term perspective when looking at the last “13 Weeks currency classification”.
For going short the same analysis can be done and the following currencies seem to fit best:
[B][I]GBP, EUR and CHF[/I][/B].
These are [I]Weak or Neutral currencies[/I] from a longer term perspective.
Currencies with a high deviation seem less interesting to trade because they are less predictable. A good example at the moment is/are e.g. the:
[B][I]AUD[/I][/B] and [B][I]JPY[/I][/B].
Some of the pairs in the “Currency Comparison Table” comply for a longer term trade based on the Technical Analysis (TA) of the Daily and Weekly chart. For the coming week these seem to be: [B][I]EUR/CAD, GBP/AUD, EUR/AUD, GBP/CAD, GBP/NZD, AUD/CHF and CAD/CHF[/I][/B][B][I].[/I][/B]
Besides this article I also use the Forex “Ranking, Rating and Score” which is also available once a week on my blog. In the article “Ranking, Rating and Score” we look in more detail at the absolute position of the currencies and pairs.
It is recommended to read the page “Currency score explained”, “Introduction to the FxTaTrader Forex Models” and “Statistics and Probabilities” for a better understanding of the article. If you would like to use this article then mention the source by providing the URL or the direct link to this article. Good luck in the coming week.
[B]DISCLAIMER:[/B] 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.